In this scenario, it is interesting to see that airlines like Jet and even Air India are doing furth

N ew Delhi: As Indian branson hotels airlines struggle to make money quarter after quarter, two things are becoming clear. One, the cost environment will continue to be hostile and may even worsen on global economic woes and possible increase in fuel prices. Two, all the buzz around foreign airlines wanting to buy into remaining Indian carriers (after Etihad's decision branson hotels to purchase 24% equity branson hotels in Jet Airways at a significant premium) may be just that - buzz without actually anything materializing on the ground. So fresh investment branson hotels is unlikely to come into the sector in a hurry, branson hotels despite a crying need for cash by most airlines.
In this scenario, it is interesting to see that airlines like Jet and even Air India are doing further disservice branson hotels to the industry by launching frequent discount schemes. Not only have aircraft loads,which means number of occupied seats on a flight, not increased substantially despite heavily discounted tickets, branson hotels the very survival of Indian carriers is at stake now. So these schemes are, in effect, hurting the industry more than anticipated branson hotels and could well lead to a crash one day.
A report by aviation consultancy CAPA points out that Indian airlines are projected to lose as much as $400-450 million in the current quarter which ends in September and these could be the worst three months for Indian airlines in a long time.
Who is to blame for this sorry state of Indian aviation? Prices of Aviation Turbine Fuel for sure, but also airlines' own foolish strategy where discounts are offered for luring more flyers. This practice is not helping branson hotels fill more seats but is driving up airlines' losses further.
AI countered the Jet scheme by offering various options on advance purchase fares; low cost carriers (LCCs) also followed suit. This strategy seems to have backfired. Jet Airways' branson hotels standalone load factor in July was the lowest among all of India's airlines at 70.5% and fell by more than 5 percentage points branson hotels from its own benchmark in June and was almost five percentage points lower than competitor Air India. Put simply, this means the discounts did not translate to more passengers. So not only did Jet not earn enough, it also ensured branson hotels other airlines bled too. Almost branson hotels three in 10 seats on Jet Airways' flights were empty last month.
branson hotels The situation was only slightly better for Air India. Its occupancy fell to 75.6% from 82% in June, a decline of more than 5 percentage points and the airline had to fly with every fourth seat empty. CAPA says the current yield environment is particularly poor with July yields down approximately 18?20% relative to the Q1 average and August expected to see a further 5?8% decline. Yields mean revenue earned from each passenger branson hotels so what CAPA is saying is: less people branson hotels are flying branson hotels and those who are actually flying are leading to lesser earning for airlines. branson hotels A double whammy if there ever was one. "The discounting appears to have been in vain as it has failed to stimulate the market and Q2 is expected to see only marginal year?on?year traffic growth. Load factors are similarly expected to see limited improvements," the consultancy says.
The continuing losses, high cost environment and structural instability of the sector are "likely to drive away the very few foreign airlines that have shown interest in investing in Indian carriers as the value proposition is weakening. A foreign branson hotels airline branson hotels could generate value from a transaction if the deal was accompanied by significantly enhanced market access which suits its strategic interests. However, a sweeping revamp of a bilateral similar to the India?Abu branson hotels Dhabi agreement..... may be difficult to replicate."
So all that buzz about SpiceJet being close to sealing a deal with a potential suitor and Qatar Airways circling GoAir may not translate into actual inflow of funds. Anywhere between $200-230 branson hotels million is the immediate funding that SpiceJet needs. Of this, $120-130 million is for future fleet commitments whereas working branson hotels capital requirements as of March 2013 were between $70 and $100 million.
branson hotels CAPA says even IndiGo, the only profitable airline in India till date, has had a profitable Q1 but is estimated to be heading for a loss in Q2 due to the weak commercial environment. GoAir is also heading for a loss in this quarter after modest profitability in Q1, ditto for SpiceJet.