India’s Airlines Growing But Losing Money

The New York Times today has a story on how India’s airline industry is growing “at breakneck speed” but having a hard time making money.

India’s outdated airports are staggering under the crush of passengers and flights, let alone giant planes, and the arrival recently in Delhi of an Airbus 380 required that the grassy edges of the runway be mowed and picked clean of rocks.

The NYT cites analysts that severe competition is causing airlines to lose $10 to $15 per passenger on every flight.

One analyst told the Times that 15% of the capacity had to vanish for the airlines to make money.

Consolidation also seems to be gaining momentum with Air India-Indian airlines merging and Jet Airways agreeing to buy Air Sahara.

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