Major airlines in India cut losses, but full recovery unlikely soon

Vijay Mallya's Kingfisher Airlines posted a Rs419-crore Q2 loss, down from Rs483 crore loss in the same period last year. According to the airline's communication to the BSE on Wednesday, operational revenue slumped 13 per cent from Rs1,323 crore last Q2 to Rs1,142 crore.

The carrier, which was a market leader with 23.3 per cent share this September, also saw a 9 per cent rise in the number of passengers carried despite a 17 per cent reduction in capacity. But the low fares till this year contributed to a 32 per cent decline in revenue from last year.

According to the carrier's statement, "Kingfisher has restructured its operations and maintains stringent cost control. This has helped show a positive EBITDA of Rs44 crore against a loss of Rs207 crore last time for domestic operations. Certain technical issues also led to grounding of aircraft causing revenue loss and hence a negative impact on the bottomline."

"The Kolkata-Bangkok sector has been added during the quarter using single aisle aircraft thereby increasing the block hour usage of the same metal (planes) deployed on domestic routes. Kingfisher suspended its Bangalore-London and Bangalore-Colombo routes and started two new routes from Mumbai to Hong Kong and Singapore," the statement added.

Analysts say the carrier, like Jet, also seems to be trying to recoup its position on the back on international operations.

Indian carriers, which posted combined loss of Rs9,440 crore, are now forced to take action to turn around operations hurt by excess capacity, increasing competition and high fuel prices on slowing economic growth, which has severely affected passenger traffic. However, the three months ending September are also known to be the lean season for travel in the country as monsoon rains, the end of summer vacations etc drive down passenger traffic and the industry's hopes are riding high on October-December quarter.