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Tuesday, 30 January, 2018, 11 : 41 AM [IST]
The airline industry will post losses of about USD 430 to 460 million in FY2019: Kapil Kaul
By Anurag Tiwari | Mumbai

CAPA India Aviation Summit 2018 kicked off today here in Mumbai at The Leela. The two-day summit will see 14 presentations on the key aviation industry trends. Kapil Kaul, CEO & Director South Asia, CAPA shared the India airline industry review for FY2018 and Outlook for FY2019 in the inaugural presentation. Emphasising on industry-wise profitability, Kaul said that CAPA believes the industry will post losses of about USD 430 to 460 million in FY2019. The FSCs are expected to project a loss of USD 900 to 925 million whereas LCCs shall record a profit of USD 460 to 515 million. LCCs’ fleet are projected to increase by 376 aircraft by March 2019. Indigo and SpiceJet are expected to debut long-haul operations by Winter 2018/19 and Summer 2019. 

According to CAPA the domestic traffic is expected to increase by 18 to 20% reaching 125 million by the end of March 2018 and around 150 million passengers in FY2019 while International passenger traffic is expected to increase by 12% reaching around 65 million by end of March 2018 and 70 to 75 million passengers in FY2019.

As per CAPA, for International operations if bilateral restrictions are lifted by the government, the international traffic shall grow close to 15% by next three to five years. 

CAPA also states that 124 to 130 aircraft including 30 regional aircraft will be added in FY2019 projecting an increase of 25%. Out of these, around 25 aircrafts will be narrow bodies for International operations and 20 to 22 aircraft will be for UDAN. 

Focusing on privatisation of Air India, Kaul said that the process is expected to be completed by July 2018 selecting the successful bidders. At present there are 4 to 6 serious bidders including four Indian carriers namely Jet Airways, Indigo, SpiceJet and Vistata and two non-airline companies.  

The jet fuel prices are expected to reach USD 70 per barrel while the capacity (ASKs) are expected to increase by 25% by the end of 2018. Kaul during his presentation expressed that DGCA is the major barrier to reforms in the Indian aviation industry as it lacks resources and skills. The industry needs independent CAA (Civil Aviation Authority) along the lines of the UK.