The decline of India’s Kingfisher Airlines, whose fleet has shrunk to 18 aircraft from 66, hasn’t only served to push air fares upward due to declining capacity in a high-demand market. At the same time it has reduced business for suppliers and airline service providers, such as maintenance, repair and overhaul (MRO) groups.
In a reversal from an earlier policy, which gave state-owned Air India preference over bilateral aviation agreements for international routes, the Indian government will now open access to private airlines.
Even though the year ended with doom and gloom, the Indian air transport sector couldn’t have asked for a better beginning to 2012 with its largest budget carrier, IndiGo, signing a memorandum of understanding for the biggest commercial aviation deal in history valued at approximately $15.6 billion. The deal, which was subsequently firmed up, called for 180 of Airbus’ A320 family narrowbodies. This topped an earlier order by the carrier for 100 aircraft and seemed a clear indication that the Indian market is back on track after suffering severe losses during 2008- 2009.
Airlines from the Asia Pacific region played a big part in the sales success enjoyed last year by European airframer ATR (Booth E01), with operators such as Wings Air of Indonesia, Malaysia’s Firefly and Skywest Airlines of Australia among its client list. ATR believes there is more to come and this week’s Singapore Airshow could well see a further 40 or so orders and commitments announced from this part of the world.
India’s Kingfisher Airlines has missed pre-delivery payments on 38 ATR turboprops, triggering an effective cancellation of the order, ATR CEO Filippo Bagnato reported last month during the company’s annual “state of the company” overview in Toulouse. Nevertheless, the development won’t affect ATR’s plans to progressively increase its production rate over the next three years while preparing to add a larger, 90-seat model to its product lineup.
A controversy is raging over the safety practices of India’s airlines following the partial “leak” of a financial audit from the Directorate General of Civil Aviation (DGCA). The report indicated that poor safety practices may be endemic in the Indian air transport sector.
India’s Kingfisher Airlines is attributing the grounding of 15 aircraft and de-leasing of another two to “rationalization” of its network to counter deep financial losses. “The airline industry in India is going through a tough period due to high costs and lower yields,” said Kingfisher Airlines CEO Sanjay Aggarwal. “We are no exception. We are taking steps to improve our financial performance and are rationalizing network, dropping unprofitable flights and expediting fleet reconfiguration.”
Shares in cash-strapped Indian carrier Kingfisher Airline fell by almost 18 percent on November 18 as company chairman Vijay Mallya worked to secure new short- and long-term funding amid reports of further routes being cut and flights cancelled. On November 17, Mallya confirmed that he is negotiating with an undisclosed high-net-worth individual in India with a view to injecting approximately $250 million into Kingfisher.
Some of India’s leading MROs have joined forces to promote the nation’s growing aerospace MRO sector. They include Air Works India, Max Aerospace, GE Aviation, SR Technic, Horizon Aircraft Maintenance, United Heli charters, Reliance Airports, Kingfisher Airlines and the Rotor Wing Society of India.
A series of new deals involving customers from the Middle East and the Indian subcontinent have fattened Honeywell Aerospace’s already substantial order book. Here at the Dubai Airshow this week, the U.S. group (Stand A470) expects to announce some $500 million worth of new business, anchored by contracts involving some of Dubai’s closest neighbors.