Indian domestic aviation to suffer Rs7,000 -cr loss this fiscal: CAPA
23 Dec 2009
New Delhi: India's domestic aviation industry is likely to report a combined loss of Rs6,500-7,000 crore in the current fiscal, according to aviation consultancy, the Centre for Asia Pacific Aviation (CAPA).
This compares to around Rs10,000 crore reported as the total industry loss for the past fiscal.
In its recent report, 'Indian Aviation: A Review of 2009 and Outlook for 2010,' CAPA says "it is estimated that Indian carriers will have accumulated operational losses in excess of Rs26,000 crore," in the four years to March 2010.
The consultancy also said that low-cost airlines, an operating model which did not exist in the domestic market until six years ago, could account for almost 70 per cent of domestic capacity in the next two-three quarters.
"This is due to the decision taken by carriers such as Jet Airways and Kingfisher Airlines to reconfigure the majority of their domestic aircraft to operate no-frills service. Air India is also planning to follow suit," it said.
The report also said it was clear that there was a limited market for full-service air travel, particularly business class, beyond the key metro routes. "The full-service airlines may in future be restricted to just a handful of services, or may even disappear entirely", the CAPA report said.
About five years back, as much as 80 per cent of the air travel in the country was for business purposes, whereas that figure is less than half today, according to the report.
A global slowdown, high fuel prices and over capacity in domestic skies have resulted in domestic carriers reporting losses since last year.
