Indian aviation industry's outlook for FY14 remains weak: Capa

Domestic commercial airlines piled up loss of $1.65 billion (Rs 8,910 crore) on a revenue of $9.5 billion ( Rs 51,300 crore) during 2012-13 with more than 40 per cent of the annual loss coming from operations in the last quarter (January-March), according to the Centre for Asia Pacific Aviation (Capa).

The aviation think tank in its India Aviation Outlook 2013-14 report further stated that average fares increased by 15-20 per cent year-on-year in the last fiscal and aggressive discounting during the traditionally weak period between January and March resulted in loss of $700 million during the last quarter alone.

"The fare levels in the current fiscal are expected to be softer than in 2012-13, and there is no significant easing around the corner in terms of costs. Fuel, the largest input cost, is expected to remain high," said Capa. Capa's profitability outlook for 2013-14 has projected that Air India would end up losing $750-$800 million (Rs 4,050-Rs 4,320 crore) during the year.

The report predicts a rosy picture for the country's four private airlines -Jet Airways, SpiceJet, GoAir and IndiGo-which are expected to post a combined profit of over $300 million (Rs 1,620 crore) during the same period.

"However, the overall industry result is expected to remain in the red dragged down by a projected $750-$800 million loss at Air India. Air India's international operations account for a whopping 80 per cent of its loss. The resumption of Boeing 787 Dreamliners will help to improve the situation but huge loss is expected to continue."

The report also states that the debt of the aviation industry has increased eight to nine per cent in 2012-13 to $14.5 billion (Rs 78,300 crore) with additional vendor-related liabilities of around $2 billion compared with an aver-age cash position of just $500-$550 million. Air India holds just over 60 per cent of that debt," said Capa. The accumulated loss since 2007 works out to around $9.5 billion as on March 31, 2013.

Courtesy: Mail Today