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Indian Aviation Industry

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Indian Aviation Industry

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  • December 2008
  • 281 Words
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“Aviation is a business where cheques fly faster than planes” -Captain G.R. Gopinath, M.D., Air Deccan Kingfisher Airlines was launched in May 2005.

Current Scenario:
Kingfisher is running under the piled up losses of Rs 2500 cr and an estimated debt of Rs 4000 cr. •Policy norms do not allow getting an overseas airline as a partner. •High level of state tax at the state level.

All expansion plans have been put on hold. Delivery of 80 aircrafts has been deferred. •In airline business a full service carrier takes some 5 to 8 years to break even. •Last fortnight Kingfisher cleared Rs167cr of Rs 967cr to oil companies and Rs 50cr of Rs 220cr to Airport Authority of India. •After a default of lease payment to GE on aircraft leasing, Kingfisher had to return 4 of its Aircrafts to the lessor. •On one side the decrease in ATF prices has led to the decrease in monthly expenditure from Rs540cr to Rs 480cr and on the other side depreciating rupee is playing spoil sport. •Due to the mounting losses Kingfisher is looking for a strategic investor with whom he can make operational alliance too. •Reduction in ATF prices and abolition of import duty of 55 on the fuel will help in stemming the losses. •If sales tax on ATF is reduced to 4% than Kingfisher will not incur any losses for the month of December. This can help in saving Rs 300cr to Rs 400cr a year on account of tax saving. Jet – Kingfisher joint operation deal

Sharing flight in off peak hours
Global distribution system that allows people who have booked on jet website to fly kingfisher.

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