Airlines in India may lose over Rs10,000 crore this year: Jet Airways chief
10 Jun 2008
Mumbai: Indian carriers are expected to make a collective loss of Rs10,000 crore this year selling below cost, Jet Airways chief Naresh Goyal said. He also sought an end to "irrational and crazy" pricing of tickets, meant to undercut each other.
''It is not just the high fuel cost. All of us (all domestic airlines) have been doing irrational and crazy pricing, selling tickets below costs. There is also no regulator in place. Otherwise this would not have happened," he said.
Goyal, who was re-elected to the board of the International Air Transport Association, said airline losses in India would double this year as carriers continued to fight for enhancing their market share.
He projected airlines in India would suffer a combined loss of $2 billion in the ongoing financial year, up from an estimated $1billion in 2007-08.
"The losses in this current financial year would double and jump to Rs 10,000 crore," he said, adding that "the losses are doubling each year and you cannot keep selling below the cost forever."
Not just low-cost carriers, ''everyone is in trouble. I don't think there is any choice but to hike fares. There is no other alternative, as today we are all living on oxygen,'' Goyal said.
Maintaining that the shareholders' money in every Indian airline was "at risk", he said the high price of jet fuel, the taxes on it as well as the congestion over airports (with aircraft hovering over not being able to land) costs a lot.
"Everyone is now realising that everyone will go bust if we cannot make our ends meet," Goyal said, warning that if some carriers did succumb to these pressures "a monopoly situation will arise. Consolidation and mergers are taking place due to such a situation".
He said Jet Airways has sought permission from the government to start flights to Dubai, Jeddah and Riyadh, which it hopes to get by next month.
He also announced plans to serve Milan in Italy from Delhi and Mumbai, besides Los Angeles and Chicago next year.
Jet Airways' proposed flight from Mumbai to San Fransisco via Shanghai would also be launched next week. The trans-Pacific flight would be operated by a Boeing 777-300 (Extended Range) aircraft.
