India August Domestic Air Passenger Growth Highest Globally

“The industry has shifted gears downward. The pace of growth in passenger markets has dipped and the freight business is now shrinking at a faster pace. With business and consumer confidence continuing to slump globally, there is not a lot of optimism for improved conditions anytime soon,” said Tony Tyler, IATA director-general and chief executive officer. (www.iata.org)

Excerpts of The IATA Release

IATA raises airlines’ profit forecast for 2011

In its first look at 2012, IATA is projecting profits to fall to US$4.9bn on revenues of US$632bn for a net margin of just 0.8%. 

Global Aviation Industry Forecast Downgraded Further

The International Air Transport Association (IATA) further downgraded its 2011 airline industry profit forecast to $4 billion. Natural disasters in Japan, unrest in the Middle East and North Africa, coupled with a sharp rise in crude oil prices, have slashed industry profit expectations.

Higher ATF Restraining Growth of Aviation Sector in India

While the rebound in global aviation industry has been strong in 2010, rising aviation turbine fuel (ATF) prices may adversely affect financial prospects of the industry as a chuck of the cost comprises ATF. High interest costs are also estimated to have dented profitability of the domestic airlines for the March 2011 quarter.

Airfares set to rise

The domestic airline industry was barely out of red, and the surge in crude oil prices is dragging it back again.

Aviation turbine fuel (ATF) is the largest cost for any airline company, accounting for nearly 40% of operating expenses. ATF prices were higher by 30% at the end of February 2011 compared to the year-ago level. It is nearly 10% higher than the average price levels in January 2011.

Indian Aviation Industry: Reeling Under Losses

Only five airline services companies are listed on the stock exchanges in India and hence only their quarterly financial information is available.

Top three of the five companies in the aviation sector reported a robust sales growth of over 20% each during the December 2010 quarter. Higher passenger volumes coupled with improved realisations enabled the industry post healthy sales growth.

Low-Cost Airlines Flying Faster

The scheduled domestic airlines recorded a 18.7% growth in the number of passengers carried during the calendar year 2010 compared to 2009.

Although the Indian economy recovered swiftly from the slowdown in 2008-09, there has been a remarkable shift in the market share of scheduled domestic airline operators.

The market share of every low-cost airlines — including Indigo, GoAir and SpiceJet — is rising at a rapid pace.

Bird’s eye view of the global aviation industry in 2010

Cautious optimism is returning. But challenges continue.

We must rebuild the industry on a new and more resilient foundation.

– IATA Annual Report 2010

Although slightly dated, the IATA Annual Report is quite insightful.

Wings of Indian Airline Industry to be clipped??

Here’s an update on the Indian aviation industry, given the treat of use of powers by the DGCA.

Airline Passenger growth in India continues

The total domestic passengers carried by Indian scheduled airlines in July 2010 were 40.84 lakh. Growth (YoY) was recorded for the seventh consecutive month. However, the number of passengers flown in July 2010 was 9.3% lower than the June 2010 figure.

In order to boost sales during the lean season (June-September), five airlines reduced their average basic spot fares on the Mumbai-Delhi route during July 2010. SpiceJet and Kingfisher Red undertook steep cuts of over 24% each.