Dec 142012

The author has posted comments on this articleTNN | Dec 15, 2012, 04.46AM IST

NEW DELHI: Has the only profitable Indian carrier so far – IndiGo – also flown into the red? The aviation ministry told Parliament this week that IndiGo lost Rs 87.6 crore in the fiscal 2011-12, after being constantly profitable in the preceding three financial years.

However, the six-year-old airline firmly contradicted the ministry’s reply and said it was profitable in the fiscal 2011-12 too.

“As a matter of policy, IndiGo does not comment on its profitability. However… stating that IndiGo did not generate profits for fiscal year 2011-2012 is not correct. The airline continues to generate healthy levels of profitability,” a statement issued by IndiGo, the country’s largest airline by domestic market share, said. tnn

The ministry reply, which IndiGo disputes, says the low cost carrier (LCC) in fiscal 2011-12 had operating revenue of Rs 5552.4 crore as against operating expenses of about Rs 5640 crore, leading to the loss of Rs 87.6 crore. In the preceding three fiscals 2008-09, 2009-10 and 2010-11, the ministry said that the airline had made operating profits of Rs 18 crore, Rs 446.7 crore and Rs 602.5 crore, respectively.

While IndiGo’s claim of profitability in 2011-12 may have come under a dispute, what the ministry reply shows is the cost hostile environment airlines face in India due to exceptionally high operating cost here. In the three financial years from 2008-09 to 2010-11, the reply says, airlines collectively lost Rs 14,814.2 crore out of which Air India group’s share was 12,801.3 crore or roughly 86.5%.

These figures would have been much worse as the reply only gave two results for 2011-12: IndiGo’s disputed loss of Rs 87.6 crore and Jet Airway’s operating loss of Rs 654.8 crore. “Financial data for 2011-12 of other airlines is yet to be received,” the statement said.

“Air India and Kingfisher may be suffering from lack of management with the politician-bureaucrat nexus over past decades destroying the former and the latter simply not having the knowhow to run an airline, but even so-called well run airlines are having a tough time trying to survive in India. Jet fuel prices of domestic flights here are among the highest in the world due to a mix of high base price and steep sales tax levied by states on that. Apart from fuel, airport charges in places like Delhi are exorbitant for both airlines and passengers,” said an airline official. India has today become the worst performing domestic aviation market globally with the country recoding steepest fall in flyer numbers.

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