Domestic airline passenger traffic growth is set to nosedive into negative territory in 2012-13 due to the ongoing economic slowdown, coupled with high airfares. Fuel prices too will remain high and the rupee will remain weak against the dollar. Yet, the airline industry will, ironically, be in a better position on the margin front this fiscal than it was in 2011-12.
Lower competition arising from Kingfisher Airlines’ exit due to financial turmoil and subsequent consolidation in industry will shore up realisations in 2012-13. This is borne out by data for the first half of 2012-13, which reveals that domestic and international realisations of Indian carriers [considering the financials of Jet Airways (standalone domestic) and SpiceJet] have risen by around 30 per cent and 14 per cent year-on-year, respectively.
However, unlike in the past when higher ticket prices resulted in lower passenger load factor (PLF), this time around the PLF is steady despite the hike in ticket prices because of the loss of seat capacity emanating from the problems surrounding Kingfisher.
18/11/12 Ajay DSouza/The Hindu
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Lower competition arising from Kingfisher Airlines’ exit due to financial turmoil and subsequent consolidation in industry will shore up realisations in 2012-13. This is borne out by data for the first half of 2012-13, which reveals that domestic and international realisations of Indian carriers [considering the financials of Jet Airways (standalone domestic) and SpiceJet] have risen by around 30 per cent and 14 per cent year-on-year, respectively.
However, unlike in the past when higher ticket prices resulted in lower passenger load factor (PLF), this time around the PLF is steady despite the hike in ticket prices because of the loss of seat capacity emanating from the problems surrounding Kingfisher.
18/11/12 Ajay DSouza/The Hindu
