Airlines trim losses by 30 per cent, Indigo posts record profit, says a report

Lower fuel prices have helped domestic carriers to trim their combined losses by an estimated 30 per cent at $1.21-1.27 billion in fiscal 2015, while budget carrier IndiGo reported an estimated record $150-175 million profit during the period, according to an industry report.

The Indian airlines reported these losses notwithstanding an estimated combined net profit of $41-67 million reported by the low-cost carriers, Sydney-based aviation think-tank Centre for Asia Pacific Aviation (CAPA) has said in its 2016 aviation outlook.

According to CAPA, the combined estimated losses of the three full-service carriers - Air India, Jet Airways and newly-launched Vistara - stood at $1.28-1.31 billion during the period, with the government-owned Air India alone accounting for $ 900-920 million.

According to CAPA, IndiGo is estimated to have posted a record profit of $150-175 million in FY2015, representing net margin of 8-7 per cent. GoAir is the only other carrier that is understood to have been in black with an estimated profit of $14-15 million, close to its peak results posted in FY 13. This result was achieved on a record revenue of $ 450-475 million," CAPA said.

"The rest of the industry is estimated to have lost around a combined $ 1.35 billion, of which $900-920 million was accounted for by Air India", it said.

India currently has nine airlines in the country.

Of these, Air India, Jet Airways and Vistara are full service carriers, while IndiGo, SpiceJet, GoAir and recent entrant AirAsia are budget airlines.

Vijayawada-based Air Costa and Air Pegasus, which commenced operations in May, are regional airlines.

Among other carriers, Jet Airways along with its subsidiary JetLite posted losses to the tune of $343 million in the previous fiscal, while SpiceJet estimated losses stood at $107 million during the period.

"Besides, the new entrants - AirAsia India, Vistara and Air Costa together reported estimated $50-60 million losses in the fiscal ended March 2015", CAPA said.

CAPA has also forecast that the domestic carriers are likely reduce their combined losses by another 40 per cent at $680-750 million by March 2016 on an expected $60-70 per barrel oil prices and dollar-to-rupee rate at 64-66 mark.

CAPA said that with India's GDP expected to grow at 7.5 per cent, it "expects to see double-digit traffic growth of around 8-10 per cent for international and close to 15 per cent for domestic."

This would result in international traffic growing to 54-55 million and domestic traffic increasing to 80 million, it said, adding domestic traffic may see a higher growth if airlines engage in "sustained aggressive" pricing.

Projecting a relatively modest capacity growth, CAPA said around 22 narrow-body planes and 10-12 regional aircraft are scheduled to be delivered to the domestic carriers during the next fiscal.