Aviation sector (in India) could face less turbulence this year (The Hindu Business Line)

January 6, 2013

Turbulence and uncertainty can best describe the year 2012 for the Indian aviation sector. In 2012 major airline companies’ profits plunged into red, staff unrest crippled two airlines and the year also saw one the major players grinding to a halt.

This was also a year when air fares shot up, forcing travellers to think twice before booking air tickets, finally resulting in declining air traffic.

Hit by rising fuel costs, hostile cost environment, continued regulatory uncertainty and rupee depreciation, the aviation sector has major challenges to overcome. For 2013, however, there are signs of a turnaround, aviation analysts feel.

DEMAND DOWNFALL

Lower competition arising from Kingfisher Airlines’ exit due to financial turmoil and subsequent consolidation in industry has helped in shoring up realisations in 2012-13. Predictably, demand growth has been a casualty of this hike in ticket prices, accentuated by the slowdown in the economy.

Complete article: The Hindu Business Line