Mumbai: There seems to be no imminent sign of relief on the cost front for Indian carriers, who are expected to post losses, recorded during the recently concluded quarter and the financial year, on the back of high fuel costs and airport taxes.
With the financial performance of Indian domestic carriers characterized by weak second and fourth quarters historically, mostly due to lower traffic, aggressive discounting of fares during the March quarter has further pushed airlines into the red.
Full year profitability requires carriers to recoup these losses in the first and third quarters, said Centre for Asia Pacific Aviation (CAPA) in a recent research report.
However, with airlines reporting losses even during the peak season, all but two in the sector are now expected to post losses for FY 2014.
“When the industry is reporting significant losses in peak season it is clear that the domestic Indian aviation market has a fundamental problem with viability,” the CAPA report added.
According to the aviation information consultancy, three carriers – Air India, Jet Airways and SpiceJet – are expected to post a combined losses in excess of $1.2 billion during Fy 2014, a figure that could rise higher as a weak outlook for March could trigger further promotional pricing, it added.
This is widely expected as there have been more than 10 different discount schemes laid out by low cost carrier SpiceJet since January 2014, which eventually led to price war of sorts with other carriers following the trend.
21/05/14 Financial Express
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With the financial performance of Indian domestic carriers characterized by weak second and fourth quarters historically, mostly due to lower traffic, aggressive discounting of fares during the March quarter has further pushed airlines into the red.
Full year profitability requires carriers to recoup these losses in the first and third quarters, said Centre for Asia Pacific Aviation (CAPA) in a recent research report.
However, with airlines reporting losses even during the peak season, all but two in the sector are now expected to post losses for FY 2014.
“When the industry is reporting significant losses in peak season it is clear that the domestic Indian aviation market has a fundamental problem with viability,” the CAPA report added.
According to the aviation information consultancy, three carriers – Air India, Jet Airways and SpiceJet – are expected to post a combined losses in excess of $1.2 billion during Fy 2014, a figure that could rise higher as a weak outlook for March could trigger further promotional pricing, it added.
This is widely expected as there have been more than 10 different discount schemes laid out by low cost carrier SpiceJet since January 2014, which eventually led to price war of sorts with other carriers following the trend.
21/05/14 Financial Express
