Indian airlines MAY order 400 aircraft this year: report
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Indian airlines MAY order 400 aircraft this year: report
New Delhi/Mumbai: India’s airlines will order as many as 400 aircraft in 2014, a year that is also expected to see growth return to aviation but with pressure on profit, a report said on Monday.
“Indian carriers expected to order up to 400 aircraft this year in addition to those already on the order books,” said Centre for Asia Pacific Aviation or Capa in its Outlook for 2014-15 on Monday.
Air India, Jet Airways, IndiGo, SpiceJet, GoAir, JetKonnect and Air Costa together have around 400 aircraft in their fleet and 350 on order. “By the end of FY2015 this is likely to have swelled to over 700 aircraft,” the report noted. Vijaywada-based Air Costa just ordered 50 Brazilian-made Embraer jets at the Singapore air show last fortnight valued at $2.94 billion.
This year is also likely to see the launch of a Tata Group airline in alliance with Singapore Airlines. The group has already ordered 20 A320s, Capa said. “Jet may also be allocated some of the more than 100 wide body aircraft ordered by Etihad at the Dubai Air Show in Nov 13. Meanwhile, IndiGo is expected to place another massive order for 200-250 additional aircraft,” the report added.
In 2013-14 domestic traffic is up 6% and international traffic for the first eight months is up 10.7%. The firm said it expects domestic growth to be in “low single digit” at 1-5% for the coming fiscal year also but projects international traffic growth at 10-12%.
Air India Ltd, Jet Airways (India) Ltd and SpiceJet Ltd are expected to post combined losses in excess of $1.2 billion in the current financial year. And this figure could rise higher as a weak outlook for March could trigger further promotional pricing, Capa said. “Air India is once again expected to incur the largest loss at close to $700 million, although this represents an improvement of approximately 20% year-on-year in local currency terms,” it said.
Jet Airways and SpiceJet are likely to report record losses, it added. In addition to their losses, Air India and Jet Airways are also likely to be impacted by travel agency defaults which have reached $40 million in Delhi alone in recent weeks and could rise further, it said.
“GoAir is expected to end the year with a break-even result or a modest profit which is disappointing after a very promising first quarter. IndiGo will be the only carrier to report full year profitability but this too will be significantly lower than our earlier estimates,” it said. On 14 February, SpiceJet, India’s second largest low-fare airline, posted its biggest-ever December quarter loss of Rs173 crore against net profit of Rs103 crore in the year-ago quarter, hurt by higher expenses, including fuel costs. Similarly, Jet Airways announced a loss of Rs268 crore for the December quarter.
Losses at Kingfisher Airlines, which hasn’t flown since October 2012, widened to Rs822.42 crore in the three months ended 31 December, compared with a loss of Rs755.17 crore in the same period a year ago, the airline said on 12 February. “As at 31 March 2013 the total accumulated losses of the airline industry over the previous seven years had risen to $8.6 billion (based on current exchange rates). Industry debt had climbed to $12.6 billion; however the full service carriers—Air India, Jet Airways and Kingfisher Airlines Ltd—accounted for 94% of this,” Capa said.
Approximately 40-50% of full service carrier debt was related to working capital. In addition, outstanding payments to vendors was worth close to $2.4 billion. In contrast, low fare airlines’ debt was just over $750 million and most of this was aircraft-related.
Worryingly, the balance sheets could come under more strain in the next fiscal year with fresh competition, like AirAsia India and Tata-Singapore Airlines, tapping into the Indian aviation sector. “Apart from AirAsia India and Tata-SIA a further 2-3 start-ups are reportedly awaiting licenses to commence national and regional operations. The induction of additional capacity when load factors are already soft, and the consequent downward pressure on yields is expected to hurt all carriers. Continued red ink may start to test the holding power of a couple of airlines,” it added.
Indian airlines may order 400 aircraft this year: report - Livemint
“Indian carriers expected to order up to 400 aircraft this year in addition to those already on the order books,” said Centre for Asia Pacific Aviation or Capa in its Outlook for 2014-15 on Monday.
Air India, Jet Airways, IndiGo, SpiceJet, GoAir, JetKonnect and Air Costa together have around 400 aircraft in their fleet and 350 on order. “By the end of FY2015 this is likely to have swelled to over 700 aircraft,” the report noted. Vijaywada-based Air Costa just ordered 50 Brazilian-made Embraer jets at the Singapore air show last fortnight valued at $2.94 billion.
This year is also likely to see the launch of a Tata Group airline in alliance with Singapore Airlines. The group has already ordered 20 A320s, Capa said. “Jet may also be allocated some of the more than 100 wide body aircraft ordered by Etihad at the Dubai Air Show in Nov 13. Meanwhile, IndiGo is expected to place another massive order for 200-250 additional aircraft,” the report added.
In 2013-14 domestic traffic is up 6% and international traffic for the first eight months is up 10.7%. The firm said it expects domestic growth to be in “low single digit” at 1-5% for the coming fiscal year also but projects international traffic growth at 10-12%.
Air India Ltd, Jet Airways (India) Ltd and SpiceJet Ltd are expected to post combined losses in excess of $1.2 billion in the current financial year. And this figure could rise higher as a weak outlook for March could trigger further promotional pricing, Capa said. “Air India is once again expected to incur the largest loss at close to $700 million, although this represents an improvement of approximately 20% year-on-year in local currency terms,” it said.
Jet Airways and SpiceJet are likely to report record losses, it added. In addition to their losses, Air India and Jet Airways are also likely to be impacted by travel agency defaults which have reached $40 million in Delhi alone in recent weeks and could rise further, it said.
“GoAir is expected to end the year with a break-even result or a modest profit which is disappointing after a very promising first quarter. IndiGo will be the only carrier to report full year profitability but this too will be significantly lower than our earlier estimates,” it said. On 14 February, SpiceJet, India’s second largest low-fare airline, posted its biggest-ever December quarter loss of Rs173 crore against net profit of Rs103 crore in the year-ago quarter, hurt by higher expenses, including fuel costs. Similarly, Jet Airways announced a loss of Rs268 crore for the December quarter.
Losses at Kingfisher Airlines, which hasn’t flown since October 2012, widened to Rs822.42 crore in the three months ended 31 December, compared with a loss of Rs755.17 crore in the same period a year ago, the airline said on 12 February. “As at 31 March 2013 the total accumulated losses of the airline industry over the previous seven years had risen to $8.6 billion (based on current exchange rates). Industry debt had climbed to $12.6 billion; however the full service carriers—Air India, Jet Airways and Kingfisher Airlines Ltd—accounted for 94% of this,” Capa said.
Approximately 40-50% of full service carrier debt was related to working capital. In addition, outstanding payments to vendors was worth close to $2.4 billion. In contrast, low fare airlines’ debt was just over $750 million and most of this was aircraft-related.
Worryingly, the balance sheets could come under more strain in the next fiscal year with fresh competition, like AirAsia India and Tata-Singapore Airlines, tapping into the Indian aviation sector. “Apart from AirAsia India and Tata-SIA a further 2-3 start-ups are reportedly awaiting licenses to commence national and regional operations. The induction of additional capacity when load factors are already soft, and the consequent downward pressure on yields is expected to hurt all carriers. Continued red ink may start to test the holding power of a couple of airlines,” it added.
Indian airlines may order 400 aircraft this year: report - Livemint
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Feel sorry for the young Indians who will now go and train to be pilots on hearing this. The flight schools wil be capitalizing on this to. I heard in India now there are over 5000 pilots looking for jobs. Indian government should spend money on its people and infrastructure...not new airliners.
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Nowhere does it say that the Indian govt is forking out the equity for these aircraft acquisitions. AI/IA are but a mere drop in the bucket for future capacity expansion.
On the contrary any expansion will only fill up the govt coffers through all the various fees and taxes which are burdening this sector.
And expanding the aviation sector is also expanding and building the infrastructure of the country. You seem to be of the mindset that aviation is not an integral component of the Indian growth story. This is precisely the thinking which portrays flying as a luxury rather than an essential and necessary part of the economy.
And for all the prospective pilots out there, we can only make them aware of the realities, it is entirely up to them as to what they do with hard earned (or borrowed) money. As always, it is a case of buyer beware.
As far as investing in its people is concerned, India has done a piss poor job of that ending up close to the top of lists of countries with the lowest per capita expenditure on health care and education. But hey, our defence expenditure is rock solid and growing.
On the contrary any expansion will only fill up the govt coffers through all the various fees and taxes which are burdening this sector.
And expanding the aviation sector is also expanding and building the infrastructure of the country. You seem to be of the mindset that aviation is not an integral component of the Indian growth story. This is precisely the thinking which portrays flying as a luxury rather than an essential and necessary part of the economy.
And for all the prospective pilots out there, we can only make them aware of the realities, it is entirely up to them as to what they do with hard earned (or borrowed) money. As always, it is a case of buyer beware.
As far as investing in its people is concerned, India has done a piss poor job of that ending up close to the top of lists of countries with the lowest per capita expenditure on health care and education. But hey, our defence expenditure is rock solid and growing.
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Show me the contracts... which don't mean squat. Contracts and deliveries can be cancelled or deferred as easily as they were entered into.
Like the monorail in Mumbai... when it's complete, I'll believe it.
Like the monorail in Mumbai... when it's complete, I'll believe it.
