Kuala Lumpur: The International Air Transport Association (Iata) on Monday almost doubled its earlier estimate of global airline losses to $9 billion (Rs42,600 crore), up from a $4.7 billion loss projection in March.
Airline firms worldwide lost $10.4 billion in 2008. Close to a quarter of those losses are likely come from Indian carriers, which account for only 2% of global traffic. Indian airlines are estimated to collectively lose at least $2 billion for the fiscal ended 31 March. The estimated loss for the fiscal gone by was $2 billion, largely because of excess capacity and high fuel bills.
Naresh Goyal, chairman of India’s second largest private carrier Jet Airways (India) Ltd, said domestic carriers would lose around $2 billion if the fuel bill goes up and excess capacity remains.
Tough times: A Jet Airways aircraft in New Delhi. The company’s chairman, Naresh Goyal, says domestic carriers will lose around $2 billion if the fuel bill goes up and excess capacity remains. Ramesh Pathania / Mint
“Numbers can tell powerful stories. $10.4 billion is the amount we lost last year,” said Giovanni Bisignani, director general and chief executive officer of Iata, in a speech at the organization’s 65th annual general meeting in Kuala Lumpur. Iata represents 230 airlines that account for 93% of international air traffic.
Around 500 of the industry’s leaders are in Kuala Lumpur for the meeting and the World Air Transport Summit.
“2009 will also see massive shifts. We expect the industry fuel bill to fall by $59 billion. But rising oil prices anticipating recovery are a great risk. $80 billion is the total revenue that will disappear with falling demand, collapsing yields, broken consumer confidence and pandemic fears,” Bisignani cautioned.
He criticized Delhi and Mumbai airports, among others, for hiking charges by 207%.
He said the trend of airports increasing charges would damage the financial health of Indian airlines.
Passengers flying out of Delhi airport are charged Rs200 and Rs1,300, respectively, for domestic and international travel. In Mumbai, the corresponding charges are Rs350 and Rs1,000. Both airports have increased airport charges by 10% beginning March.
“Nothing similar to this kind of recession had happened to aviation,” Bisignani said. “The ground has shifted. Our industry has been shaken. This is the most difficult situation that the industry has faced.”
However, Kapil Kaul, chief executive, Indian subcontinent and Middle East, Centre for Asia Pacific Aviation (Capa), an aviation consultancy, said he expects local airlines to reduce losses this fiscal.
Tarun Shukla in New Delhi contributed to this story.