Saturday, November 17, 2018

Headwinds leave bleeding airlines with few options

New Delhi: It’s been a winter of discontent for the Indian aviation industry. InterGlobe Aviation, owner of IndiGo Airlines, posted a loss of Rs 652 crore for the July-September quarter, as compared to a profit of Rs 552 crore in the corresponding quarter last year. Jet Airways reported losses for a third straight quarter with Q2 suffering net standalone losses of Rs 1,297 crore. Hammered with losses of Rs 1,323 crore and Rs 1,036 crore respectively in the previous two quarters, the airline lost 70 per cent of its listed market value this fiscal.

SpiceJet, which had bucked the trend last year with a small IndiGo Airlines 105 crore profit for Q2, also went into the red with a Rs 389 crore loss for this July-September quarter. IndiGo, the poster boy of Indian aviation that has steadily reported profits, has seen its stocks wilt over 35 per cent this year after a Bloomberg analyst poll had predicted a much lower loss of Rs 391 crore.

By the end of the financial year, the industry is expected to post a combined loss of Rs 13,000 crore, and the panic is palpable. It’s not that market demand is poor. India, with a growth rate of 16 per cent in passenger traffic, is among the fastest-growing aviation markets. IndiGo grew nearly 17 per cent to a revenue of Rs 6,185 crore in Q2 this year. SpiceJet’s revenue too went up nearly 4 per cent.
17/11/18 Gurbir Singh/New Indian Express