Page 21 - AAA MARCH - APRIL 2015 Online Magazine

FEATURE AVIATION BUSINESS

IndiGo has placed three large
aircraft orders totalling 530
aircraft from Airbus in the
last nine years

falling global crude prices and growth in escape of cash-strapped low-cost carrier significantly reduced SpiceJet’s third-
passenger traffic. SpiceJet from being shut-down following quarter loss, which could have been,
Global crude prices have plummeted grave financial woes. otherwise, significantly higher,” says Kapil
by almost 60% — from $110 a barrel in SpiceJet, which was on the verge of Kaul, South Asia CEO of CAPA.
June 2014 to close to $45 per barrel. being grounded, got a lifer mid-January The not so happy story of one of the
Aviation turbine fuel (ATF), or jet fuel, is when its owners Kalanithi Maran and three full-service airlines - Jet Airways
the single-largest element contributing his KAL Airways Pvt. Ltd transferred continues as it is being termed as “feeder
to airlines’ costs in India and accounts for ownership, management and control of carrier” after UAE’s national carrier
nearly 50% of the operating cost of the the company to Ajay Singh, a co-founder Etihad picked up a 24% stake in the airline.
carriers. of the airline who sold his stake in 2010. The airline has also been threatened by
Indian carriers could save up to 24.80 Following the transfer of ownership, the advent of Vistara, and has scrapped
billion rupees (US$400 million) in 2014- the board of SpiceJet approved the sale its low-cost operations and revamped its
15 on account of lower fuel prices, aviation of shares worth 15 billion rupees in fleet to focus on a premium-class product.
consultancy firm Centre for Asia Pacific the company after a deal was reached But the country’s second largest
Aviation (CAPA) says. between current majority owners and airline, which posted a loss of 36.67 billion
“After facing a constant stream of Singh who is leading a rescue plan. rupees in 2013-2014, has been trying to
economic, regulatory and structural “The worst is behind us. But we will be put its house in order after a series of key
challenges that has resulted in India’s taking tough decisions. We are reviewing strategic mistakes.
airlines losing a combined US$11 billion every aspect of the business and a decision “We plan to reduce losses in 2015,
over the last eight years, Indian aviation will be taken in the next few weeks,” says consolidate in 2016 and turn profitable
could be on the verge of entering a new Sanjiv Kapoor, chief operating officer of in 2017. We are already on track as
era of profitable and sustainable growth,” SpiceJet. our international business has turned
it says. The airline’s liability exceeded assets profitable. We now have to take our
But the biggest relief for the Indian by 14.6 billion rupees as of Sept. 30. But business forward,” according to Jet’s CEO
aviation industry is the miraculous the good news is “lower oil prices have Cramer Ball.
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