After a rather disappointing & loss-plagued 2009, the year ahead will mark a turnaround in the books of the Indian aviation industry. Steven Philip Warner explains…
With revival in air traffic being witnessed in the second half of 2009, there is no doubt that even in terms of footfalls, the sector will experience a better 2010, perhaps even bettering the 7.8% increase in passenger count seen during the year. All-in-all, 2010 will be a year which is bound to witness some restructuring acts with minimum focus on inorganic and fleet expansion activities. Hatim Broachwala, aviation analyst, Khandwala Securities says, “As the load factor is still low and output costs are increasing, airlines should refrain from taking up any expansion plan as this would further burden the airlines. They should instead focus on consolidating and finding out ways to increase their air traffic.”
The key focus areas for some of the airlines are expected to be as follows: Air India – restructuring and conversion of about 30% of its capacity into the budget model; Jet Airways – increased focus on its international operations, which today contributes to 62% of its revenues, with domestic operations increasing turning all-economy; and Kingfisher Airlines – restructuring of its cost base (including reductions in debt obligations) and reworking on fleet composition, especially for its longhaul operations to North America. For 2010, IndiGo, which has been the leading example of an efficient LCC, and the only one to make profits in 2009, will continue grabbing more space, with six more aircraft expected to be inducted in 2010. With fare increases expected in the first quarter of 2010, reduced competition, rational pricing & implementation of cost control measures will lead to a better year ahead for the airlines!
All in all, taking into account impossible-to-forecast government policies, one can safely say that once written off (all thanks to their suicidal strategies), a now ‘more disciplined’ aviators’ lot is bound to strike back with improved bottomlines this forthcoming fisca
GLOBALLY, IT’S TOUGH LUCK!
Globally, the sector is witnessing a rise in traffic, although yields continue to remain under pressure. Encouragingly, in the APAC region, during the past six months, there has been a increase in volumes. However, the damage inflicted by 2009 will time beyond 2010 to repair. Thus, global carriers need to remain disciplined on costs and capacity in 2010. The good news is that 2010 will see a definite improvement, with narrower losses (at $5,6 billion) as compared to $11 billion in 2009; the bad news is – profit-making days are more than just a year away for the sector, globally.
Read more.....
With revival in air traffic being witnessed in the second half of 2009, there is no doubt that even in terms of footfalls, the sector will experience a better 2010, perhaps even bettering the 7.8% increase in passenger count seen during the year. All-in-all, 2010 will be a year which is bound to witness some restructuring acts with minimum focus on inorganic and fleet expansion activities. Hatim Broachwala, aviation analyst, Khandwala Securities says, “As the load factor is still low and output costs are increasing, airlines should refrain from taking up any expansion plan as this would further burden the airlines. They should instead focus on consolidating and finding out ways to increase their air traffic.”
The key focus areas for some of the airlines are expected to be as follows: Air India – restructuring and conversion of about 30% of its capacity into the budget model; Jet Airways – increased focus on its international operations, which today contributes to 62% of its revenues, with domestic operations increasing turning all-economy; and Kingfisher Airlines – restructuring of its cost base (including reductions in debt obligations) and reworking on fleet composition, especially for its longhaul operations to North America. For 2010, IndiGo, which has been the leading example of an efficient LCC, and the only one to make profits in 2009, will continue grabbing more space, with six more aircraft expected to be inducted in 2010. With fare increases expected in the first quarter of 2010, reduced competition, rational pricing & implementation of cost control measures will lead to a better year ahead for the airlines!
All in all, taking into account impossible-to-forecast government policies, one can safely say that once written off (all thanks to their suicidal strategies), a now ‘more disciplined’ aviators’ lot is bound to strike back with improved bottomlines this forthcoming fisca
GLOBALLY, IT’S TOUGH LUCK!
Globally, the sector is witnessing a rise in traffic, although yields continue to remain under pressure. Encouragingly, in the APAC region, during the past six months, there has been a increase in volumes. However, the damage inflicted by 2009 will time beyond 2010 to repair. Thus, global carriers need to remain disciplined on costs and capacity in 2010. The good news is that 2010 will see a definite improvement, with narrower losses (at $5,6 billion) as compared to $11 billion in 2009; the bad news is – profit-making days are more than just a year away for the sector, globally.
Read more.....
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Prof. Rajita Chaudhuri's Website
domain-b.com : IIPM ranked ahead of IIMs
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
IIPM B-School Detail
