Kingfisher is India’s smallest airline, but the sector’s looking up

Posted: April 20, 2012 in Asia, Aviation & Airports (General News), India
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Are the fortunes of the heavily troubled Indian aviation industry set to take a turn for the better?

Kingfisher has become the smallest airline in India. Reuters

Kingfisher has become the smallest airline in India. Reuters

Quite possibly, says a report in Business Standard. A reduction in over-capacity caused by significant flight cancellations by crisis-struck Kingfisher Airlines have led to improved yields for other local carriers. The trend looks likely to continue if oil prices don’t spiral out of control.

“The finances of airlines would improve in 2012-13 on the back of better pricing of tickets due to rationalisation of capacity. Capacity addition would also be moderate and the airlines would make money,” Kapil Kaul, chief executive officer (South Asia), Centre for Asia Pacific Aviation (CAPA), told the newspaper.

Last month, a report by Kotak Institutional Equities also noted that yields (revenues per passenger per kilometre) had stayed strong in the January-March quarter because of constantly reducing capacity by Kingfisher.

Still, an improving fourth-quarter won’t make up for all the pain of the past. CAPA expects airlines (including Air India) to post a cumulative loss of $2.5 billion for 2011-2012.

Don’t expect any miracles in fourth-quarter earnings either because operating costs for airlines continued to climb.Business Standard points out that while domestic fares for the March-ending quarter climbed 15-18 percent from the previous quarter, it was offset by a 15 percent increase in jet fuel — the largest expense item for airlines – and a 11 percent depreciation in the rupee…..

Read the full story at Firstpost Business….

By FP Editors 
Apr 20, 2012


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