Indian Carriers Snapshot

Yesterday we came to know that our group of ministers have allowed the Indian carriers to import the jet fuel directly to run their day to day operations. While it was a moment to cheer for the Indian carriers but not so good move for the Indian oil companies.

By allowing the carriers to import the fuel means that there will be a reduction of 10 to 13 Percent (15 to 20 Percent as quoted in various news papers) in their fuel costs which amounts to 50% of the carriers operating costs.

In my version Government should be blamed for its policies, few days ago I was reading the news papers, where the representatives of Indian oil marketing companies showed their resistance against the approval of direct fuel import by the airlines, according to the reports India is jet fuel exporter and Indian oil marketing companies under the Indian tax code use to levy various state and central tax due to which Jet fuel in India was one of costliest in the world.

This means, we would see a hit on the Indian oil marketing companies profits second a major hit on the tax collection from this sector at the time when the Government is finding the ways to fill its trade gap.

But given all the soaps like allowing carriers to import direct fuel, providing extensions in credits, forcing banks to restructure their debt and last but not least debating on 49% FDI in the aviation sector will it help them.

I thought why not check the carriers how they are doing in the market and how will perform in future. I have looked in the major carrier of the country (Viz. Air India*, Go Air, Indigo, Jet Airways*, Kingfisher * and Spicejet).

Airlines Statistics (Indian Carriers covered).

According to the Indian carriers regulator Director General Civil aviation (DGCA reports) in the year 2011 (January 2011 to December 2011) Indian carriers carried 606.63 Lakh passengers against 520.21 Lakh in 2010 which means a growth of 16.6%

Market Share

In the year 2011 Jet Airways* had the maximum share with 25.9% followed by Indigo Airlines at 19%, Kingfisher at 18%, State owned airlines Indian Airlines at 16%, Spicejet at 14% and lastly Go Air with 6.1%.

Cancellations

If we speak in terms of cancellations, in total the cancellation rate for the year 2011 was 1.6% out of which Air India has the highest cancellation rate with 4.2% followed by Jet Lite at 1.7%, Kingfisher at 1.6%, Jet Airways 0.9%, Spicejet 0.8%, Go Air 0.6% and lastly Indigo at 0.3%

On-time, Performance.

One of the major indicators is on time performance of the carrier in which Jet airways hold the top position with 91.1% followed by kingfisher at 90.7%, Indigo at 88.8%, Jet lite at 88.5%, Go air 87.3%, Spicejet 82.8% and in last Indian airlines with 73.7%

Complaints

In total Director General Civil aviation received a total of 12885 complaints which 2.2 complaints per 10,000 passengers carried in which Go air received the highest number of complaints which is 3.2 per 10K, followed by Jet airways at 3 per 10K, Indigo at 2.2 per 10K, Spicejet at 2.1 per 10K, Kingfisher airlines at 1.7 per 10K, Jet lite 1.7 per 10K and in last Air India (Domestic operations) at 1.4 per 10K

If we look the above mentioned figures it seems that low cost carriers are performing better than the full service carriers.

Although Indigo has 88.8% on time performance but it enjoys the highest total number of flight hours and was the only carrier which has major expansion plans plus only carrier which showed profit in its books during the time when the rest of the carriers were staring at the gate of Indian Government for Bailouts.

It seems in this budget we would be seeing an increase the the train fares especially for second AC and first AC tickets, it will result in a churn of travelers from train to plane, given the fact that our industry is growing at at pace of 10% this move would act as an catalyst, I think rather than begging the government the companies should emphasize on increasing their load factor and tuning their efficiencies while operating carriers. But one cannot comment on the Indian mentality especially the aviation industry where they need the bread and butter on the table to eat rather than earning it.

I have traveled in all scheduled carriers and I would prefer the Indian airlines followed by Spice Jet, Indigo, jet Airways*, Kingfisher*, and in last Go air. All we can do now is we have to wait and watch whether the companies will start performing or will still look for bailouts.

* Includes their low cost carriers means jet airways along with its low cost brands Jetkonnect and Jetlite, Kingfisher along with its low cost brand Kingfisher Red (no more in existence) and Air India along with its low cost brand Air India Express.