Aviation Watch - IATA sounds cautious note on Indian aviation sector

IATA sounds cautious note on Indian aviation sector

The International Air Transport Association (IATA) expects India’s aviation industry losses to exceed $1.5 billion in 2008, second only to that of the US. It has also indicated that there are chances of some carriers going down into bankruptcy and suggested that the government needs to step in or else there is a risk of the current aviation boom going bust. IATA has enumerated problems that are facing India to include the high cost structure of the industry, declining volumes, and surplus capacity. Added to this, traffic growth is down to 7.5% in the first six months of 2008 against 33% for 2007 and in fact, there has been a decline in traffic in the recent months. The build up of large capacities in expectation of fast traffic growth is now proving to be a huge burden on airlines. A typical lease charge for a mid-sized aircraft is about Rs 1.5 crore a month and this is making airlines bleed who have started to return leased aircraft. But analysts believe that this sort of capacity reduction would only reduce the rate of cash burn since the operating cost structure of the aviation industry continues to remain unviable. IATA has declared that India is one of the most expensive places to buy aviation fuel (ATF) which is nearly 60% more costly in Mumbai than it is in Singapore. It has also highlighted the fact that infrastructure constraints are also adding up to operating costs as aircraft spend too much time on the ground waiting to take-off or are hovering in the skies a lot longer because of congestion on the ground. These problems only get compounded by the route dispersal policy that forces airlines to deploy a certain percentage of capacity on unviable routes, it added.

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Rathyatra – Puri, Orissa ( Early July )

This spectacular chariot festival celebrated for 8 days is held at the famous Jagannath Temple at Puri (Orissa).< Thousands of devotees flock to Puri during the occasion, as they believe that a glimpse of Lord Jagannath in his chariot gives salvation. Thousands of devotees pull the chariots to the Gundicha Mandir situated about 3 kms away.

IATA sounds cautious note on Indian aviation sector

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