New Delhi, May 24: Indian airlines are likely to suffer a combined loss of $1.4 billion this fiscal, according to a study by the Centre for Asia Pacific Aviation (Capa).
Air India is likely to be the “worst performer” with an estimated loss of almost $1.3 billion.
Jet Airways has benefited the most from the crisis at Air India and Kingfisher Airlines, and the private carrier is expected to place an order of up to 100 narrow-body aircraft during this fiscal.
In its analysis titled “India Outlook 2012-13”, Capa said while Kingfisher would suffer an estimated loss of $220-260 million, the remaining four private carriers — Jet Airways, IndiGo, SpiceJet and GoAir — could post a modest profit of around $200 million.
Air India officials said the strike by the Indian Pilots Guild, which had affected the carrier’s international operations, could lead to a loss of an additional Rs 300 crore.
“The dramatic contraction of Kingfisher from 66 to 16 operational aircraft, half of which are regional turboprop ATRs, and the pilots’ strike hitting Air India’s long-haul global operations, have left the domestic and international business open for Jet Airways,” the report stated.
“Despite the carrier’s own weakness, it may try to take advantage of the situation to expand both domestically and internationally as it had done in 1996 when a number of its competitors had closed down,” it added.
The Naresh Goyal-promoted carrier is expected to place a large fleet expansion order to meet both replacement and growth requirements. It is actively evaluating the Airbus A-320neo.
Jet is also likely to lease up to 10 wide-body A-330s to expand its European network. Referring to its profit outlook for Indian carriers barring Kingfisher and Air India, the analysis said their yield improvements would be negated by the challenging cost environment and supply-side constraints.
Domestic capacity growth has been estimated at 7-8 per cent in 2012-13 with traffic growth hovering at 15 per cent against 17 per cent projected earlier because of Kingfisher downsizing its fleet.
Capa said Indian carriers were expected to add approximately 24 aircraft during the year, including eight Q400s to be inducted by SpiceJet.
“Much will depend upon the impact of oil prices and other input costs on airfares. Upside growth is limited by the fact that capacity expansion will be measured, and with load factors already quite strong, there is limited opportunity to grow traffic through higher occupancies,” the study said.
Jet Airways loss
Jet Airways’ loss has widened to Rs 298.10 crore in the quarter ended March 31, impacted by a sharp rise in fuel cost coupled with a sliding rupee.
The combined losses (Jet Airways and Jetlite) negated a healthy 24.3 per cent rise in total income at Rs 4,638.9 crore during the period.
The airline saw its fuel bill jumping 42.4 per cent to Rs 1,822.5 crore against Rs 1,279.7 crore in the year-ago period.