New Delhi, Dec 24 (Inditop.com) The Indian aviation industry encountered some turbulent weather in 2009, being hit not just by falling traffic and revenues, but also high fuel costs, high cost of credit and unrest among workers of three dominant carriers.
The sector, once a symbol of India’s vibrant economic progress, has seen its fortunes nosedive since last year following the global slowdown. Even though the industry staged a pick up since the middle of this year, it was not robust enough, experts maintained.
Painting a gloomy picture, the global aviation body, the International Air Transport Association (IATA), says the Indian aviation industry, which accounts for two percent of air traffic worldwide, accounts for 11 percent of global losses.
“The worst is over. But the commercial aviation industry has to go a long way before a complete recovery,” Bisignani said here last month. “It will take three-four years for the sector to reach the level it was at before the crisis hit the industry.”
However, the situation was expected to look up. Bisignani said the losses for the Indian aviation sector were set to fall to $1.5 billion (Rs.7,500 crore) this fiscal, from around $1.7 billion (Rs.8,557 crore) in 2008-09.
The year was also turbulent for two major private carriers, Jet Airways and Kingfisher Airlines, which totted up hefty debts and losses. Vijay Mallya-led Kingfisher reported a loss of Rs.1,602 crore in 2008-09, while Jet said it was Rs.1,032 crore in the red.
The pack was, however, led by national carrier Air India, which saw its net losses more than double to Rs.5,548 crore in 2008-09. The immediate reasons were higher fuel prices and interest costs, as well as falling passenger load.
There were other factors behind its woes as well. A cut in performance-linked incentives for pilots in September led to a five-day strike, leading to losses of over Rs.200 crore during the agitation.
Jet Airways, too, faced a similar turmoil with its pilots going on strike to protest the dismissal of two senior colleagues in September, while Kingfisher faced the the heat for non-payment of dues to critical suppliers.
Yet, when the biggies struggled, no-frills carriers such as Indigo Airlines and SpiceJet more or less maintained their passenger share.
Jet Airways had the largest market share of 25.3 percent, followed by 24.3 percent for Kingfisher Airlines, 17.4 percent for Air India, 13.8 percent for IndiGo, 12.4 percent for SpiceJet, 4.6 percent for GoAir, 1.9 percent for Paramount and 0.3 percent for MDLR.
The collective passenger load factor in the domestic segment also grew marginally to 3.99 million during the first 11 months of 2009 (January to November) as against 3.78 million in the corresponding period of last year.
Gurcharan Bhatura, director general of the aviation industry think tank, Foundation of Aviation and Sustainable Tourism (FAST), says 2009 on the whole was certainly better for the Indian aviation sector than last year.
“The Indian aviation sector will not come back to the same order — not for a few years. Airlines have realised now that they would have work out a new model for the future and they are already begun doing it,” Bhatura told Inditop.
According to Samyukta Sridharan, chief commercial officer of SpiceJet, the capacity induction will henceforth be far more measured.
“Additional capacity induction was undertaken during the boom time. Now airlines have realised that it is not easy to sustain it for long. So we have increased the number of flights with the available fleet we have. Others are doing the same,” said Sridharan.
But Ankur Bhatia, managing director of Amadeus, an IT solutions provider for the travel and tourism industry, said the worst could be over. “There has been an increase of over 8 percent in passenger load this year. We have grown on a lower growth.”
“Fares are likely to go up next year on increasing demand. But it will take carriers 10 years from now to recoup the losses.”
