New Delhi: Aviation consultancy Centre for Asia Pacific Aviation has predicted another round of mergers and acquisitions consolidation in the domestic airlines sector over the first half of the coming fiscal year centred around low-cost airlines.
“India’s airline sector appears headed for another round of consolidation in 2009, as carriers seek to return the industry to profitability after a turbulent couple of years,” the consultancy said in its March outlook released on Thursday.
“Earlier attempts have not been particularly successful. But this appears to be the only option,” it said adding there was still a need to reduce airline seat capacity in Indian skies by 7-10%, which is “the equivalent of grounding around 20 aircraft”.
Domestic airlines such as Kingfisher Airlines Ltd and Jet Airways (India) Ltd have already pulled out 10.9% capacity from the market over the last 10 months, it said. Indian carriers ended fiscal 2008 with about 400 planes, many of which have been grounded or leased out.