Kingfisher Airlines teeters on the edge

IN the past week, two of Asia’s most successful airlines painted a bleak future for the industry when they reported steep decline in half-year profits. Singapore Airlines’ net profit plunged 62 per cent from S$633 million (US$494 million) to S$239 million (US$186 million). That of Emirates fell from AED3.4 billion (US$925 million) to Dhs827 million (US$225 million), down 76 per cent.

The week ended with more dismal news as Kingfisher Airlines – India’s second largest carrier – struggled with a US$1.2 billion debt to stay afloat The airline has cancelled some 4o per cent of flights across the country, inconveniencing hundreds of passengers at a time when air travel was peaking. But Kingfisher chief executive Sanjay Agarwal, who recently announced wrapping up the budget arm of the airline to focus more on the full-service sectors, said there was no question of the Kingfisher closing down. That’s left to be seen.

In all these cases, fuel price has been quoted as the culprit – as it has always been. That aside, it signals uncertain times ahead even as Singapore Airlines, Qantas, Japan Airlines, All Nippon Airways and AirAsia celebrated new start-ups taking to the air next year. Until then, if Kingfisher does collapse, one cannot be sure if there is not another waiting in line.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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