Consolidation the mantra for aviation, but high ATF prices play spoilsport

Written by Shauvik Ghosh | Shaheen Mansuri | New Delhi, Mumbai, Dec 20 | Updated: Dec 21 2007, 05:45am hrs
The Indian aviation industry is expected to post collective losses of around Rs 4,000 crore during the current fiscal, which would be twice that of the previous fiscal, but analysts feel that the industry is just short of seeing light at the end of the tunnel.

For the industry, the year was also one of consolidation, with

Jets takeover of Sahara being closely followed by Kingfishers coupling with Air Deccan and the merger of the public carriers, Indian and Air India under the National Aviation Company of India Ltd (NACIL).

It was also the year of the low cost carriers, with operators seeing their margins shrinking due to the continually rising aviation turbine fuel (ATF) prices but still surviving, thanks to very high seat factors.

At the end of the first half of the current financial year (April to September), GoAir recorded 108% growth in passenger traffic. In the first quarter, the airline recorded 95% growth in passenger traffic, while in the second quarter, the passenger traffic volume increased 123%, Jeh Wadia, managing director, GoAir said.

V Thulasidas, CMD, Air India expects a promising year ahead, We have a host of new developments which would be actualised. The phased induction of new aircraft would continue and the route expansion would benefit our passengers a great deal, he said.

The year also saw the industry along with a proactive ministry getting down to business more briskly. The ministry got the ball rolling with airport modernisation plans and drafting clear-cut policies for everything from domestic airlines flying overseas to allowing new regional carriers.

The Civil Aviation Policy (also known as) Vision 2020 may be stuck with the Cabinet yet to clear it but the ministry has still gone ahead and cleared all the non-contentious policies by spinning them off into separate policies.

The Directorate General of Civil Aviation (DGCA) made safety a major issue and along with the Airports Authority of India (AAI), celebrated safety week earlier this month.

On the negative side, the sector is still reeling from several problems ranging from massive pilot shortages temporarily overcome by foreign pilots to shortage of air traffic controllers (ATC) leading to possible safety issues. But fortunately, no major mishap has occurred in the skies in this past one year.

The congestion at major airports is expected to clear out soon, leading to an added benefit of lowering cost of carriers suffering from high unplanned expenditure due to delays.