Thursday, July 22, 2010

Low-cost carriers travel needs end here

The country's leading low-cost air carriers -- IndiGo [ Images ], SpiceJet and GoAir -- are set to nearly double their fleet capacity over the next 17 months.

This addition by LCCs is set to increase the number of low-cost seats in the domestic network to 80 per cent of the total. Currently, Indian air carriers offer 115,000 domestic seats in a day and 70 per cent of this is low-cost.

The airlines, who have come out of a nearly two-year recession, have together ordered 48 new aircraft, either on purchase or on long-term lease, valued at a little over Rs 12,000 crore. It will expand their airplanes from 56 to 104.

IndiGo, the largest LCC, with a market share of 16.4 per cent, is getting 21 new Airbus-320s, of which seven will be added this year. SpiceJet, in the process of being taken over by Sun TV [ Get Quote ] promoter Kalanathi Maran, will induct about 15 new airplanes during the period, seven in this financial year. GoAir, currently with eight aircraft, is adding two this year and might advance deliveries of 10 Airbuses earlier slated to come in 2011-12.

"This year, we will get seven new aircraft and next year, 14 more. As we will be going international, some of these aircraft (about six) will be used there," said a top executive at IndiGo, who did not want to be identified.

SpiceJet is following. "With Maran coming in, we have the money now; earlier, with Wilbur Ross, the aim was to consolidate and break even. The company was earlier planning to bring in four aircraft, but we will add three more to the tally. For the next financial year, we will require about eight more," a senior executive of the Gurgaon-based carrier said, on condition of anonymity.

Apart from the growth in passengers, expected to rise by 20 per cent this financial year, at least two, SpiceJet and IndiGo, will be starting international services. The domestic passenger numbers grew by 15.6 per cent in 2009-10, after falling by 11.2 per cent in the preceding year.

SpiceJet will start operations from September and will fly to Male, Colombo, Dhaka and Kathmandu in the first phase. The civil aviation ministry had earlier turned down their proposal to fly to Colombo but the airline is pressing this and expects to receive permission.

IndiGo is to start such operations next year in August. It is looking to use at least five or six aircraft in the foreign skies. The destinations have to be within a five-hour duration and include Singapore, Bangkok, Kuala Lumpur and Dubai [ Images ].

The International Air Transport Association has forecast that global airline industry profits will reach $2.5 billion this year, as it recovers from the $9.4 billion loss in 2009 when the US and Europe battled their worst recession in decades.

In contrast, the full-service carriers, which also have LCC operations and have faced financial problems, are more cautious. Kingfisher does not have a plan to add more aircraft. Jet Airways [ Get Quote ] had earlier decided likewise, but may review this. "We are relooking at our plans and may add some aircraft during this financial year as the passenger numbers are growing and we will have to add capacity," said a senior executive.

Government-owned Air India [ Images ], which had ordered 111 aircraft for Rs 45,000 crore, will not add any aircraft this year. It will add the Boeing 787 Dreamliner in the next financial year but the numbers are not confirmed.

No comments:

Post a Comment