Financial Daily from THE HINDU group of publications
Tuesday, Jul 12, 2005
Marketing - Market Shares
Indian Airlines market share dips to 38.2 pc
New Delhi , July 11
INDIAN Airlines, which aims to join a global airline alliance in the long term, saw its market share dip to 38.2 per cent in 2004-05 from 40.5 per cent the previous year. This information came out at the meeting of the Parliamentary Consultative Committee on Civil Aviation that was held here today.
The drop in market share has been mainly due to fall in `capacity share' that dipped to 41.7 per cent in 2004-05 from 43.6 per cent the previous year. An airline's fleet size and its deployment determine capacity share.
The airline, whose 43-aircraft fleet acquisition plan has been pending with the Government for more than two years, is leasing aircraft to meet its short-term requirements. IA, at present, is considering leasing 10 Airbus A-320s, five A-319s and six ATR-72s.
Meanwhile, IA has reported a net profit of Rs 18.50 crore during April-May compared to Rs 5.10 crore in the corresponding previous period. The operating profits were Rs 22.80 crore and Rs 10.95 crore, respectively.
IA's revised net profit of Rs 17.5 crore is less than the previous year's mainly because aviation turbine fuel (ATF) prices rose on an average by almost 30 per cent in 2004-05. The airline reported a net profit of Rs 44.17 crore during the previous year.
The hike in ATF prices resulted in fuel costs rising by Rs 450 crore in 2004-05 vis-à-vis the previous year.
Despite reporting a lower net profit the airline saw higher daily passenger and cargo carriage traffic. In 2004-05, the airline carried 23,442 passengers and 361 tonnes of cargo every day compared to 20,301 passengers and 321 tonnes the previous year.
The number of daily flights operated by the airline touched 322 in 2004-05 up from 307 in 2003-04. The revenue from ground-handling activities rose from Rs 180 crore in 2003-04 to touch Rs 221crore in 2004-05.
The airline also undertook various cost control measures that resulted in a saving of Rs 148 crore in 2004.
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