India's airlines are poised to cut their cumulative losses by as much as two-thirds in the financial year starting in April, aviation consultancy CAPA India said on Tuesday, with airline executives saying ticket prices are finally rising.
The consultancy's forecast is for Indian carriers to lose a collective $550 million to $700 million for financial year 2020, including a return to profit by low-cost carriers, against an estimated $1.7 billion loss for the 2019 year ending in March.
The latter figure is an improvement to CAPA India's last forecast for losses of up to $1.9 billion issued in September when oil prices were higher.
“The opportunity exists to create a sustainable, profitable future within 1-2 years,” CAPA India CEO Kapil Kaul said as the forecast was released at its annual conference in New Delhi. “This will drive serious investor interest given the size of the market.”
A narrowing of losses will ease the pressure on Indian carriers in financing the hundreds of Airbus SE and Boeing Co jets they have on order. They are tapping rising demand from a growing middle class in the world's fastest-growing major domestic aviation market and expanding operations internationally.
Domestic air traffic is forecast to rise by 14 to 16 percent in financial year 2020, CAPA India said, with international traffic set to be 10 to 12 percent higher as the Indian fleet expands by more than 90 aircraft.
“We plan to expand international aggressively,” SpiceJet Ltd Chairman and Managing Director Ajay Singh told reporters on the sidelines of the conference. “It is time to start looking at narrowbodies for medium and long haul.