While other Indian airlines may return to profit in the next fiscal year, state-run Air India is expected to keep losing money as its debt continues to pile up.
According to the Centre for Asia Pacific Aviation, India’s private airlines could possibly have a combined profit of $300 million from April 1 as they serve rising demand with a leaner, cost effective organisation.
“Things are looking better,” Jet Airways chairman Naresh Goyal told reporters at an aviation conference over the weekend. “We all have been rationalizing our capacity, and 2010 will be better than 2009.”
For January, the Civil Aviation Ministry said domestic travel jumped 23 percent to 4.1 million passengers while the International Air Transport Association said worldwide international airline passenger traffic rose 6.4 percent.
“The last quarter of 2009 and early signs in 2010 give an indication that the worst could be over,” said Indian Civil Aviation Minister Praful Patel.
“If the current growth is maintained, the Indian aviation sector is on a strong path of recovery by the beginning of 2011.”
But Air India has a dreary outlook according to Bloomberg, the carrier estimated to lose up to 30 billion rupees ($655 million) as it faces increasing competition and continues to fly unprofitable routes.
The carrier has received government aid but is still swimming in debt, which doubled to 152.41 billion rupees in June after it purchased 111 new planes from Boeing Co. and Airbus SAS.
“Reducing losses in the next three to five years will be extremely difficult for Air India” said Kapil Kaul, chief executive of CAPA’s Indian arm.
In August last year, Air India’s managing director Arvind Jadhav said the carrier would create four business units, slash capacity and pay debt in hopes of returning to profit in three years.
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