Airlines suffer losses despite heavy passenger traffic

New Delhi, Dec 26 (UNI) A booming economy led to red-hot growth in air transport sector during 2006 as the government managed to privatise Delhi and Mumbai airports despite dogmatic Leftists.

The growth was underpinned by increased seat capacity and price stimulation resulting from increased competition.

All airlines -- including Air India (AI) and Indian -- placed orders for 480 new aircraft as expert research projected that domestic passenger traffic will reach 150 to 180 million by 2020 with international traffic in excess of 50 million. The current figures are 64 million and 27 million.

As the Rs 2,300 crore plan of Jet Airways to take over Air Sahara fell through, the AI-Indian merger plan moved ahead. Civil aviation minister Praful Patel promised the new mega entity should emerge by next fiscal year beginning April 2007, something that will optimise fleet acquisition, leverage the asset base, strengthen networks and achieve economy of seats.

While the future of Air Sahara remained uncertain, AI started receiving the first of 68 Boeing jetliners. And so did Indian. The first of 43 Airbus aircraft to replace its aging fleet arrived in October.

With an increasingly open economy, strong growth in international trade, healthy foreign exchange reserves and increasing foreign direct investment, India is likely to have aircraft fleet of 1,000, including replacement of the current fleet of 275 aircraft, with an estimated value of 80 billion dollars.

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