India airlines flying into stronger profits

India airlines flying into stronger profits

New Delhi: India’s private airlines are set to post stronger profits this year and order up to 200 new aircraft as the economy rebounds from the global financial crisis, a study said on Wednesday.

The airline sector has been one of the most vibrant symbols of economic progress by the country of 1.2 billion people, but it was buffeted by the global slump of 2007-2009, which slowed the domestic economy.

The Singapore-based Centre for Asia Pacific Aviation forecast in a study on the Indian sector that carriers would report total profits of $350-$400 million for this financial year to March 2012.

The centre had estimated a profit of $250-$300 million for private carriers in the financial year just ended.

However, struggling state-run Air India is expected to announce losses of $1 billion to $1.25 billion, the centre said, up from an estimated loss of $650 to $700 million for the last year.

Indian private carriers are also expected to place orders in 2011 for up to 200 new aircraft with a list price of $11-$12 billion, the centre forecast.

Domestic capacity is projected to grow by 12-14% but that is expected to be outstripped by demand with traffic projected to grow 17-18% and possibly as high as 20%.

The private carriers include Jet Airways, SpiceJet, Kingfisher and IndiGo which took flight after India liberalised the sector.

The move opened the way for cheaper airfares and prompted many travellers to migrate to planes from low-cost trains.

However, the total debt of Indian carriers could reach close to $20 billion by the end of this financial year, partly as a result of fleet expansion.