The aviation industry in India is expected to post losses of nearly Rs 10,000 crore for the financial year ended March 2009, compared to Rs 4,000 crore in FY08.

Along with the three listed airlines ? Jet Airways, Kingfisher Airlines and low cost carrier SpiceJet, other unlisted carriers like GoAir, Indigo and south India-based Paramount are projected to be in financial turmoil against the backdrop of falling travel demand, global recession and pending dues with the Airport Authority of India (AAI) and oil marketing companies.

Jet had posted a net profit of Rs 143.40 crore in the first quarter of FY09, Rs 356 crore in the second quarter and Rs 214 crore in the third quarter. Kingfisher posted losses of Rs 157.87 crore in the first quarter, Rs 483 crore in the second and Rs 626 crore in the third quarter. Spicejet also reported losses of Rs 129 crore, Rs 198 crore and Rs 18 crore in the first, second and third quarters, respectively.

An analyst from IL&FS Investsmart says, ?The sector will post losses, at least 5-10% higher than what they posted in the third quarter of FY09. The grim results would be due to a negative growth in air traffic by nearly 40% in the March ended 31, 2009 quarter. Though the aviation turbine fuel (ATF) which contributed 40% of the operating cost to any airline was stable at $40-$45 a barrel, airlines could not recover their operating costs since they have to collectively pay dues worth Rs 6,000 crore to the AAI towards airport usage fee and Rs 5,000 crore to oil marketing companies against purchase of ATF.?

A broker from Sharekhan broking firm added, ?The airline sector has been lobbying for a tax break on ATF that would lower their burden of losses, but the government has not taken any initiatve to declare ATF under the ?declared goods? category that would attract a 4% sales tax across the country.

Against negative news on all fronts, aviations stocks were down nearly 90% in the fourth quarter. Going forward, the stocks are unlikely to perform good in the medium term.

In a landmark development in 2008, bigger players like Jet and Kingfisher forged a strategic alliance to narrow their mounting losses but the alliance was not on track in the fourth quarter. However, Vijay Mallya, chairman, Kingfisher Airlines had in January 2009 said,? The alliance between Jet Airways and Kingfisher Airlines will take six months to be fully operational. The two carriers have been co-operating ?very closely in many ways? but it is not simple to put into operation the agreement signed by us last October.?

Wings clipped

•The aviation industry is expected to post losses of nearly Rs 10,000 crore for the financial year ended March 2009, compared to Rs 4,000 crore in FY08

• Jet had posted a net profit of Rs 143.40 crore in the first quarter of FY09

• Kingfisher posted losses of Rs 157.87 cr

• Spicejet also reported losses of Rs 129 cr

• The grim results would be due to a negative growth in air traffic by nearly 40% in the March ended 31, 2009 quarter

• Airlines could not recover their operating costs since they have to collectively pay dues worth Rs 6,000 crore to the AAI