Rough weather

While a recent report by consulting firm KPMG believes that airlines in India will be raking in profits by 2011 once most infrastructural issues have been sorted out, it is the present that worries most airlines. Every airline in India has drastically reduced service, cut back on several sectors and even reduced flights on that most hallowed of sectors—Delhi-Mumbai. But that has not seemed to stem the losses, one airline executive ruefully mentions. “It is actually cheaper to keep the planes on the ground than fly them on certain sectors,” he says.

Several 20-somethings who had spent lakhs of rupees hoping for a job in the pilot’s seat or even as cabin crew are suddenly finding their job prospects bleak, as many airlines have, informally at least, frozen hiring. Others such as GoAir have started to let go of personnel as they cut back service. At the time of writing, the market grapevine in Mumbai had it that Delhi-based low-cost SpiceJet was set to be taken over by Vijay Mallya’s Kingfisher Airlines. SpiceJet officials deny the story and Kingfisher officials are livid at the rumours. “Think about it: We are in the middle of integrating Deccan and about to start international operations, and then there is talk of integrating a wholly different carrier with a different fleet?

These stories are being floated by merchant bankers to pump up valuations,” says an angry Kingfisher official. What is known is that Kingfisher has further delayed starting its international operations till September (from August) and is seriously contemplating a onestop service to the US, instead of a direct Bangalore-San Francisco service. “We are thinking of a Gulf stop-over since fuel is significantly cheaper there,” says a spokesperson.

—Kushan Mitra