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Indian carriers to return to profit in 2010: forecast
After a turbulent couple of years, 2010 could bring cheer to the badly battered Indian carriers.
After a turbulent couple of years, 2010 could bring cheer to the badly battered Indian carriers.
The Indian aviation industry (except Air India) would turn into profitability in 2010 with a combined profit of $250-300 million (Rs 1,170-Rs 1,404 crore) , according to a forecast by aviation consultancy Centre for Asia Pacific Aviation (CAPA).
CAPA said domestic traffic would go up by 15 per cent or more next year.
“This is higher than the expected increase in capacity of just under 10 per cent, which should assist carriers achieve higher load factors and improved yield. It will be important for airlines to maintain capacity discipline and to keep control of costs,” said Kapil Kaul, CEO, Asia Pacific, CAPA.
CAPA said domestic yields will increase by 5 to 7 per cent in 2010-11 and possibly by as much as 10 per cent in the third quarter of next year, which will be the most profitable.
International traffic, particularly outbound travel, which remained positive even during the downturn, is expected to grow at 10 to 12 per cent.
“Yield in both economy and premium classes are expected to be firmer. Premium volumes and revenue overall are likely to recover faster ex-India as opposed to inbound traffic,” CAPA said.
As full service carriers like Jet Airways and Kingfisher are aggressively converting their planes into low fare services, CAPA said that the domestic market might become almost entirely low cost.
“However, the lead performer in the market is expected to be IndiGo which has maintained the best focus on operational performance and costs,” it said.
As per CAPA’s prediction Air India would continue to post losses. And the merger between Air India and Indian would be unlikely to be completed in 2010.
It said Jet Airways and SpiceJet would achieve full year profit in 2010-11, and Kingfisher would achieve profitability in its domestic operations.
