New Delhi, Jul 3: Despite high fuel prices, airlines in India can be run profitably, according to a latest study. The study, conducted by KPMG-- a global network of professional services firms-- predicts India's air traffic to touch 310 million by 2012. It points out air travel is not mere statistics but a phenomenon with people opting for airlines because quality time and productivity is increasingly becoming the focus.
''While oil prices across the globe have risen sharply, the increase in traffic from tier II to tier III cities has sent a clear message that air travel is becoming a highly bankable mode of transportation,'' says the study titled 'India Aviation: Flying Through Turbulence'.
Although it acknowledges that the increase in jet fuel prices is taking its toll on the airlines profits, the study says the airlines can be run profitably if they concentrate on improving efficiency and optimising cost, and switch to leaner business models.