Analysts forecast traffic growth but scant profits for Indian airlines

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By Bryan Corliss

Oct. 17, 2022 © Leeham News: After sustaining major losses in their most-recent fiscal years, India’s airlines will recover in 2022. But rising fuel and labor costs, plus weak prospects for financing will constrain near-term growth.

That’s the analysis of Aairavat Transport & Technology Ventures consulting firm.

An IndiGo Airlines A320Neo on the runway at Mumbai. IndiGo is India’s largest airline. Photo by Timothy A. Gonsalves.

AT-TV’s assessment is less bullish than Boeing’s market outlook, which projects Indian airlines to add 25% capacity over the next year, with long-term growth targeted for 7%. Airbus is slightly more cautious, projecting 6.2% annual growth over the next two decades.

India is one of the world’s largest aviation markets. It’s also been one of the most challenging, with bankruptcies and constant financial distress plaguing the industry.

  • India airlines have been in upheaval
  • Tata Group wants new aircraft for Air India
  • Indian airlines sustained major losses last year
  • OEMs see long-term growth, but near-term outlook is choppy

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Achieving net zero carbon is a promise you can keep: P&W’s Webb

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By Scott Hamilton

Sept. 26, 2022, © Leeham News: The International Civil Aviation Organization (ICAO) is nearing the next step in support of dramatically cutting emissions by airlines and the aviation industry.

Graham Webb

“ICAO has been working for about the last three years on something called a long-term aspirational goal (L-TAG). That’s regarding a study that was conducted by a number of their scientists to determine if it is feasible for the aviation industry to reduce its carbon emissions specifically, to achieve a net zero standard. That’s what for a long-term aspirational goal is,” said Graham Webb, Chief Sustainability Officer for Pratt & Whitney. “At this point, the study has been completed and has been reviewed by 93 member states. It would appear that the initial motion of the language that is going to be put forward will pass.”

ICAO previously adopted the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). L-TAG is the next step, Webb said in an interview this month with LNA.

“Once that is in place, it will enable ICAO, much as it already is done with CORSIA, to establish policies that would then be enforced by all its member states in a common, in a related way as opposed to the concern that many people have had, where you would see a patchwork. You would see some countries, such as the United States, providing incentives through vendors’ tax credits. You would see Europe in the form of mandates and taxes. They have this Emissions Trading Scheme that they’ve been putting forward and running through the Parliament. The overall objective is to have this singular global aviation industry, regulatory body, ICAO, that would then set the guidelines for the industry.”

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Pontifications: Biofuels, hydrogen, batteries are nice but far in the future. Solution exists now.

By Scott Hamilton

Oct. 11, 2021, © Leeham News: EcoAviation was the Number One topic at the Oct. 3-5 IATA AGM in Boston.

IATA, the International Air Transport Assn., set a number of lofty goals to remove carbon emissions from commercial aviation by 2050. Interim goals were also set.

Tim Clark, the president and COO of Emirates Airline, didn’t mince words about these goals.

“People are expecting us… by the end of this decade, to take out 40% of our emissions… We are in la la land if you think we are going to do this,” Flight Global reported.

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Europe’s airline recovery: a tale of two continents

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By Judson Rollins


June 24, 2021, © Leeham News: The recovery in passenger air travel from COVID-19 has been wildly uneven. A dramatic recovery in passenger volume – although not yield – in many domestic markets has been offset by a continuing sharp slump in international traffic.

The latter has proven particularly crippling to European airlines, most of which have miniscule domestic markets. Intra-EU travel, although generally permitted by member countries, has been slow to recover as business travelers have failed to return in meaningful numbers.

Meanwhile, long-haul travel remains hampered, most recently by an ever-changing landscape of “red zone,” “orange zone,” and “green zone” labels, plus other restrictions placed on arriving travelers.

The bright spot is strong leisure travel demand, which is propelling the continent’s low-cost carriers much closer to recovery than their legacy counterparts. This LCC-versus-legacy split brings into sharp relief the state of European airline traffic.

Source: European Centre for Disease Prevention and Control


  • Vaccine rollout ahead of many developed markets; certificate program launching next week.
  • Legacy carrier recovery is dragging out, weighed down by business and long-haul travel woes.
  • LCCs performing relatively well, with some on track to fully recover next year.
  • Train service unlikely to displace airline demand.

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Global airline recovery is patchy, driven by domestic traffic

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By Judson Rollins


May 20, 2021, © Leeham News: Despite widespread hope, the global passenger travel recovery many expected in 2021 has proven elusive to date. Airline industry advocate International Air Transport Association (IATA) said that March global passenger traffic was still down more than two-thirds from 2019.

First-quarter airline earnings in most parts of the world have been lackluster or worse as borders remain closed and business travel continues to be deeply depressed, even within the few countries where vaccine rollouts have made the greatest progress. And jet fuel prices have rebounded to nearly where they were before the pandemic.

Aircraft parked in Alice Springs, Australia. Source: Bloomberg.

Traffic volumes are rapidly growing in the US and Chinese domestic markets, but US carriers are reporting average yields 20%-30% below pre-COVID levels. Chinese carriers don’t provide any visibility into their yields. Forward booking data from IATA shows the domestic-international divergence will only widen in the coming months.

Air cargo continues to cushion the fall in passenger revenue at many airlines, but to nowhere near the extent necessary to fully offset it.

  • International travel continues to weigh on airline earnings globally.
  • US carriers are optimistic about the strength of leisure recovery, less so on business.
  • Asia and Australasia remain largely isolated due to strict border controls.
  • EU internal borders are slowly reopening; vaccinated travelers likely to be admitted soon.
  • Cargo provides a revenue offset to some regions, but not all.

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Unsustainable – and growing – airline debt load weighs on OEMs, suppliers

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By Judson Rollins


April 22, 2021, © Leeham News: COVID-19 has forced every layer of the commercial aviation supply chain, apart from cargo airlines, to streamline their businesses and raise cash to survive. Nowhere has this been more true than for passenger airlines, the end-customers for most aviation products.

Before the pandemic, passenger carriers were taking advantage of cheap capital to invest in both new and used aircraft. However, most have stretched their balance sheets beyond imagination by pledging every unencumbered asset – even frequent flyer programs – to raise additional debt.

International Air Transport Association (IATA) economist Brian Pearce said in a February webinar that governments provided $101bn of repayable loans and tax deferrals in 2020 alone. Another $125bn was raised from banks, capital markets, and lessors. More will be required this year.

Governments and markets backstopping the world’s airlines, aided by central bank money printing, are why fewer than 50 have ceased operations since the start of the pandemic. This is not materially worse than a typical year, but it doesn’t begin to reflect the scale of the ongoing financial shock to airlines.

  • Airline demand recovery is prolonged in most regions; new tax and cost pressures loom.
  • Debt loads will continue to grow this year; interest expense is mounting.
  • High leverage may depress airline capital expenditures through 2030.
  • Governments may finally ground loss-making state carriers, adding to used aircraft inventory.
  • Aircraft production cuts are already impacting the supply chain.

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Bjorn’s Corner: Do I get COVID in airline cabins? Part 6.

June 12, 2020, ©. Leeham News: In our Corner series about flying during the COVID-19 pandemic, we now look at how different worldwide organizations are engaged to understand the COVID-19 pandemic and how to handle it in an air transport context.

Based on input from the industry stakeholders, the organizations have in the last weeks issued plans for the rebuild of the global air transport system.

Pandemic and air transport. From ICAO’s home page.

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Mid-year production update at Airbus

July 27, 2017, © Leeham Co.: It’s mid-way through 2017 and LNC is taking its second look at production and delivery stream flows for the Big Four airframe manufacturers.

We examined Boeing Monday in advance of its earnings call Wednesday. Today we look at Airbus in advance of its earnings call today. We look at Bombardier and Embraer next Monday.

We use the Airfinance Journal Fleet Tracker as the basis for our exam.

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Finnair sees little effect from LCC long-haul service

June 6, 2017, © Leeham Co.: Low cost airlines, notably Norwegian Air, are increasingly getting into the long-haul business, but Finnair so far isn’t affected much.

Pekka Vauramo, president and CEO of the legacy airline, told LNC in an interview at the annual IATA conference yesterday that only about 10% of its routes face competition from the LCCs.

Most of its long-haul service heads east toward Asia, he said. Far fewer routes head west over the Atlantic, the prime target for the emerging LCC long-haul service.

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Bombardier optimistic about China

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June 5, 2017, © Leeham Co.: Bombardier’s activities in China, where the fuselage for the CSeries is co-produced, have been at a standstill.

None of the Memorandums of Understand or Letters of Intent have been converted to firm

Bombardier Q400.

orders. A recent news report suggested renewed talks between COMAC, China’s commercial aircraft enterprise, and Bombardier over acquisition of the CSeries program

LNC sat down with Fred Cromer, president of Bombardier Commercial Airplanes, at the annual general meeting of IATA to discuss these and other issues.

  • An update on the COMAC-CSeries relationship.
  • An update on the slow-selling Q400 and CRJ programs.
  • An update on the oft-discussed CS500.
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