New Delhi: The combined net loss at India’s embattled airlines widened 44.4% to Rs8,557.37 crore in the last fiscal, making it the worst year on record for an industry beset by high costs, excess capacity and a slump in passenger traffic.
State-run Air India alone posted a loss of Rs5,548 crore in the year ended 31 March, more than double the Rs2,226.16 loss it had run up in the previous year according to data released on Thursday by the civil aviation ministry and the Directorate General of Civil Aviation, or DGCA.
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InterGlobe Aviation Pvt. Ltd-run low-cost carrier IndiGo and Paramount Airways Pvt. Ltd were the only ones to post profits, of Rs82.16 crore and Rs7.26 crore, respectively.
As economic growth slowed and travel demand slumped in the wake of a global recession, the combined net loss for the industry widened from Rs5,922.74 crore in the previous fiscal.
At Jet Airways (India) Ltd and its subsidiary JetLite, the loss widened to Rs1,032.70 crore from Rs986.38 crore in the previous year. The loss at Kingfisher Airlines Ltd narrowed to Rs1,602 crore from Rs2,084.48 crore.
Put together, the private airlines lost Rs3,009.37 crore in the last fiscal, down from Rs3,696.58 crore the year before, thanks in part to the profit posted by IndiGo and Paramount. In the previous fiscal, Paramount had been the only airline firm to post a small profit, of Rs23.1 crore.
“You have to look at operational losses as there are a lot of sales and leaseback transactions that happen. The depreciation method has also been altered by airlines which has changed P&L (profit and loss),” said Kapil Kaul, India CEO for the Centre for Asia Pacific Aviation. “The operational losses for airlines would be higher by about 10-15% than the final losses that have come out.”
Sales and leaseback of aircraft refers to the practice of selling an aircraft on the company’s books and leasing it back immediately.
Steep losses forced Indian carriers to curtail their services last year.
Air India, civil aviation minister Praful Patel said in Parliament, removed 25 sectors from its schedule in the past 12 months. They included international routes such as Amritsar-Birmingham, Delhi-Los Angeles, Mumbai-Dar-e-Salaam, Delhi-Seoul, Mumbai-Seoul, Ahmedabad-Sharjah, Chennai-Bangkok, Hyderabad-Bangkok, Nagpur-Bangkok, Guwahati-Bangkok, Delhi-Kuala Lumpur, Bangalore-Sharjah, Delhi-Lahore, Goa-Sharjah, Chennai-Sharjah, Trichy-Doha-Calicut, Kozhi- kode-Kuwait, Calicut-Muscat and Kochi-Muscat.
Given the excess capacity in the market that still exists, losses are likely to continue for the carriers in the current fiscal as well, Kaul said.
“Collectively, in the period between 2006-07 to 2009-10, airlines could see their losses mount to Rs23,000-25,000 crore at an operational level, with half of them accruing from for Air India alone,” he said, adding, “I would think in 2009-10, the losses would be around Rs7,000-8,000 crore at an operational level.”
Graphics by Yogesh Kumar / Mint