Indian aviation: A good story that can boomerang

Indian aviation: A good story that can boomerang

Indian aviation: A good story that can boomerang

Mumbai: A continuing slump in global demand coupled with steep fall in premium passenger traffic has hit the global aviation sector to such an extent that even with a steep fall in Oil prices, the industry revised its downward forecast to a whopping $4.7 billion from an earlier loss-forecast of $2.5 billion in December 2008.
Overall losses that airlines faced in 2008 was above $5 billion, but that was largely due to an average oil price of $99 per barrel over the year. Oil prices, which formed an average 33 per cent of overall operating costs of airlines in 2008, are expected to drop to 25 per cent of operating costs with an expected fuel price of $50 per barrel, according to the International Air Transport Association (IATA). Also, industry spending is expected to fall to $116 billion from $168 billion in 2008.
“Fuel is the only good news. But the relief of lower fuel prices is overshadowed by falling demand and plummeting revenues. The industry is in intensive care,” said IATA director general and CEO Giovanni Bisignani.
IATA also termed the current crises as the deepest post the Great Depression. With industry revenue falling by 12 per cent ($62 billion) to $467 billion, the crisis has been termed far greater than that post-9/11, when industry revenues fell by 7 per cent or $23 billion.
Giovanni also took a dig at the Indian aviation sector, saying that the country’s story is a good one that can boomerang. Giovanni was referring to the enormous cost at which airports in Mumbai and Delhi were being “reshaped”.
According to him, India has been a great story and under Praful Patel, there have been more than 20 bilateral agreements signed and aviation has benefited immensely.
“But it takes 20 years to build a runway,” he added, pointing out at the lack of infrastructure in the country. On taxing of Indian fliers with development fees, he said that it’s a step in the wrong direction.
25/03/09 Shashank Shekhar/Indian Express

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~ by anand213 on March 25, 2009.

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