These are early days yet, but the Indian aviation industry seems to be turning the corner-slowly and surely.

  • Close to 4.5 million passengers flew in India in December, which  was the highest number of passengers flying domestically ever.
  • Airlines are already pushing with expansion plans, Indigo a low  cost carrier which serves 20 Indian cities, is expanding its network.
  • The airline are also on a hiring spree with Indigo set to hire  1000 more people in the coming months, including 100 flight crew and 400 cabin crew
  • Jet Airways and Spicejet are so bullish that they expect to stay  in the black in the coming quarters and Kingfisher hopes to become profitable in the next financial year
  • Clearly, the Indian aviation industry seems to have risen from  the ashes of 2008

Analysis:
Considering the close linkage of the industry with the price of crude oil it would not wise to make a short term bet based on performance in the last couple of months when crude prices have been low. However, the long term growth story will be good given the increasing per capita income and addition of new airports which will take the flying to even the rural part of the country.
Author: Rahul Sonthalia, Analyst, Kredent Group

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  1. Sector View: Aviation
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  3. Indian Economy – Review and Analysis, January 2010