29.5.13

Aviation snippets


Budget carrier IndiGo was the only Indian carrier to remain profitable even as its peers bled, while Dubai-based Emirates overtook Air India to emerge as the first foreign carrier to fly most international traffic from and to the country.
According to the latest report by Centre for Asia Pacific Aviation (CAPA), the airline industry lost an estimated $1.65 billion ( Rs.9,235 crore) on revenues of $9.5 billion ( Rs.53,172 crore) “but IndiGo was exceptional with an estimated $100-110 million profit on revenue of $1.5-1.6 billion.”
CAPA also observed that on the international front, an important development was that for the first time a foreign carrier, Emirates, claimed the highest market share (over 12%) for traffic to/from India, overtaking Air India from its historical leadership position.
“While India’s second-largest international carrier, Jet Airways, saw only a marginal increase in traffic as it consolidated its network and dropped services to points such as New York JFK, Milan, Johannesburg and Kuala Lumpur,” the report said. CAPA estimates that India’s airlines posted a combined loss of $1.65 billion ( Rs.9,235 crore) in FY13 ($1.15 billion, if Kingfisher is excluded), down from approximately $2.28 billion ( Rs.12,761 crore) the previous year.
However, FY14 could be profitable for the four private airlines — Jet Airways, IndiGo, SpiceJet and GoAir — which could post combined profits of $250-300 million ( Rs.1,399 crore- Rs.1,679 crore) or more next fiscal, says CAPA.
According to the report “international traffic growth is expected to be more buoyant than domestic and could grow by 10-12% as Indian carriers expand and as more bilateral entitlements are expected to be granted to foreign carriers.”
In contrast, domestic traffic is expected to expand by only 4-6% in FY14, with most of the growth to occur in the second half of the year, the report said, adding that Malaysian budget carrier AirAsia’s possible entry in the second half of this year could spur local demand to some extent.
However, only national carrier Air India may be left behind in seizing the international opportunity as international operations account for 80% of its losses due to key structural viability issues on its overseas routes due to poor alignment between its fleet structure and route network, and weak commercial capability, particularly in offshore markets.
Jet is already profitable on international operations and is expected to further strengthen its performance in the coming year as a result of its increasing cooperation with Etihad. IndiGo and SpiceJet are both nearing breakeven on overseas routes, the report observed.


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