Recession hits aviation industry

Recession hits aviation industry

Recession hits aviation industry

Hyderabad: The ongoing recession is expected to result in severe losses for airlines in 2009, particularly for the private players, which comprise 75 per cent of the domestic aviation market.
In a three-day symposium on “Opportunities and challenges facing aviation industry in Indian subcontinent’’ organised by the Vaughn college of Aeronautics & Tech, USA, National Aerospace Laboratories and Sreenidhi Institute of Science & Technology, industry experts opined that the airline industry is plagued with several problems including high aviation turbine fuel prices, rising labour costs and shortage of skilled labour, rapid fleet expansion and intense price competition among players.
“Most players are going through unacceptable levels of losses. Markets are under extreme price competition.
Bulk of the growth has come from low price points, but disappeared when airlines attempted to raise fares to break-even,’’ said Gilbert George, senior general manager, Jet Airways

Industry body, International Air Transport Association (IATA), expects cargo traffic to fall 13 per cent, passenger traffic to go down by 5.7 per cent and airline revenues to decline by 12 per cent or $63 billion in 2009. “The Indian aviation industry transformed from being a regulated and poorly managed sector to an open, friendly and strategically important industry for the country’s economy. However, rapid growth resulted in resource crunch and infrastructure is not in line with expansion,’’ said Aajay K Mehra, managing director, South Asia, Airbus.
Drawing a parallel to previous recessions, which had hit travel

markets successively for three years, IATA does not expect traffic growth above 4 per cent until 2011.


~ by anand213 on April 19, 2009.

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