DELHI: It is now
official and for everyone to see. The Directorate General of Civil Aviation has
pegged the losses of airlines in the year 2011-12 at Rs 10,000 crore, hinting
at a disturbing trend of how India is losing its pitch for a potential aviation
market, both domestic and internationally.
While industry sources have pegged
the operational losses at Rs 26,000 crore for the period 2007-2010 for all
airlines, DGCA figures based on returns filed by the airlines show that Air
India alone incurred over Rs 17,000 crore of loss from 2008-2011.
The passenger movement has decreased
from 16.6% to 9.3% in the months of January-February 2012 as compared to last
year, the aircraft movement reduced from 19.7% to 11.2%.
The setback, ministry says, is
largely attributable to high fuel costs. The airlines have also suffered from
inadequate fares recovery due to intense competition. Almost all airlines were
operating below the cost meeting margins, bringing the sector down as a whole.
Alarmed by the sudden losses declared
by all airlines, except IndiGo, the Aviation Ministry woke up to gathering key
details. Apart from understanding whether these losses was making airlines cut
corners and not operate mandatory routes as per the Route Dispersal Guidelines,
the ministry has also set up an inter-ministerial group to analyse factors
causing this stress.
Airlines were asked to submit a
recovery plan in order to avail further relaxations from banks. Recently, the
ministry also gathered data from airlines on the extent of external commercial
borrowings (ECBs) that they would want when the sector is opened up. An effort
to ease this financial burden through the ECB route is very active. The
ministry has already asked state governments to rationalise VAT on fuel.
However, the situation is not set to
turnaround. With increase in airport charges at key metro airports of Mumbai
and Delhi by over 300%, the airlines are only likely to suffer.
The upcoming new terminal in Chennai
has also proposed terminal charges that are higher than those being charged by
the New Delhi’s T3 terminal. Many international airlines have withdrawn from
the Indian market on account of high airport charges.
“One airline, Air Asia had informed
about suspension of its services from Mumbai and Delhi citing structural issues
in the Indian aviation market, which included airport and handling costs at
above airports. Restriction on VISA was cited as another reason for suspension
of flights,” said Minister of Civil Aviation Ajit Singh in a written reply to a
question in the Rajya Sabha.
The fleet size in India is going to
touch the 1000 mark in 2020, according to the fleet plans revealed by various
carriers.
“The actual number of new aircraft in
the next 10 years will depend on growth factors and some of these expansion
plans may get shelved,” a ministry official said.
Looking at other avenues of revenue and cost-saving, the ministry
has proposed the setting up of MRO facilities within India. “We have set up a
Civil Aviation Promotion Advisory Council which will focus on aeronautics policy,”
the Minister said.
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