Dark clouds ahead for Indian aviation - ICRA

ICRA

12/04/2019 08:37

** ICRA Ltd  ICRA.NS  has raised concerns on increasing
airfares in India's aviation sector and its negative impact on
passenger traffic growth, a result of recent groundings of
aircraft due to several reasons.
    ** The groundings, it said, have impacted about 15 pct of
the total industry capacity and consequent flight cancellations
have resulted in about 30 pct to 40 pct increase in airfares
over September 2018 to March 2019.
    ** While a rise in airfares are likely to support the
profitability of airlines in an environment of high costs, the
impact on the passenger growth does not bode well for the
industry, the note says
    ** The research firm expects passenger traffic growth for
March 2019 to be lower year-on-year.  urn:newsml:reuters.com:*:nL3N2190Y2 
    ** ICRA added that the Airbus 320 neo aircraft family with
the Pratt & Whitney engines have also been facing recurring
technical glitches, which may result in the Directorate General
of Civil Aviation ordering the grounding of these aircraft as
well
    ** The resultant impact on passenger traffic growth will be
a credit negative for the industry, according to the research
firm's note. 
    ** The grounded planes include about 80 percent of Jet
Airways Ltd's  JET.NS  total fleet over unpaid dues to lessors.
The beleaguered airline has slipped 5.87 pct so far this
year urn:newsml:reuters.com:*:nL3N21L19I urn:newsml:reuters.com:*:nL3N21C2R2 urn:newsml:reuters.com:*:nL3N21S2YJ
    ** SpiceJet Ltd  SPJT.BO  had to ground 12 planes last month
after countries and airlines around the world banned Boeing Co's
 BA.N  global 737 MAX fleet following a deadly Ethiopian
Airlines plane crash which killed all 157 people on
board. urn:newsml:reuters.com:*:nL3N2103Q0 urn:newsml:reuters.com:*:nL3N21U10M
    
  

 ((Reuters Messaging:
chandini.m.thomsonreuters.com@reuters.net))