Airline companies in India are going through a rough phase except a few. With the ever rising fuel cost, the revenue/profit numbers continues to topple. In the last 5 years, there are couple of new entrants in the market. The players who were believed to be low-cost carriers changed the game and overtook full-service carriers in terms of market share. There are lot of notable events happening in Indian airline industry.

“The component of fuel cost in the total operational cost of Indian carriers (airlines) is approximately 50%, while the same is around 33% in other markets” Tony Tyler, Director General & CEO of IATA. Earlier in an interview, Vijay Mallya led Kingfisher also said that the rising fuel costs has taken a toll in their revenue numbers.

Below are some of the notable events happened in this year in Indian airline industry:

• Shares of Kingfisher were down 4.8% to Rs.10.90 apiece after India’s aviation regulator suspended its licence on Saturday.
• Kingfisher owes $2.49 billion (around Rs.13,400 crore today) to creditors and had accumulated $1.9 billion in losses by 30 June, according to the Centre for Asia Pacific Aviation (CAPA), a consultancy.
• Kingfisher hasn’t paid salaries to their employees for 6 months
• A group of Air India pilots demanding exclusive rights to fly new Boeing Dreamliners called off a 58-day strike, bowing to pressure from the government and a Delhi court order
• Irrespective of the decrease in capacity of 17% due to a strike by a section of pilots, Air India posted Rs 4,757 crore revenue during April-August, up 6.5% over the corresponding period of 2011
• Government-owned carrier Air India is expecting all 27 Dreamliners it ordered to be delivered by 2016
• With the first Boeing 787 already having arrived in Delhi, Air India is going to get five more in 2012
• IndiGo, a 6 year old airline became the countries leading carrier in terms of market share. It overtook the market leader Jet Airways in the month of Jun-July.
• Indian government allowed foreign carriers to buy up to 49% stake in domestic airlines, India’s leading private airline, Jet Airways could be the first to receive investment from Etihad Airways
• To regain the market share, the countries 2nd and 3rd biggest (by market share) airlines Air India and Jet Airways have announced up to 40% discounts on tickets booked a month in advance.

After all above events that happened this year, below chart explains the market share of Indian carriers at the end of September 2012.

Kingfisher Airlines, which was once considered as one of the top three carriers in the country now has the least market share of 3.5%.

Image source: DGCA, India
Author: Karthick Prabu