Mahindra Aerospace has no plans to Enter Commercial Aviation.
Mahindra Group Chairman and Managing Director Anand Mahindra on Thursday denied that the group might start a new Airline.“Mahindra Aerospace has no plans to enter commercial Aviation. It is restricted to the manufacture of utility Aircraft and Aerostructures,” Mahindra wrote in a post on Twitter.
Two people said on condition of anonymity earlier that the Mahindra Group might start a new Airline through a joint venture.
The group is yet to submit a final proposal for the Airline and is in the process of finalizing the investors, one of the two people said.
“Two Indian conglomerates are planning to start Airlines one through a joint venture with a foreign Airline and other with the help of an investor. These are at conceptual stages. The business models are not finalized,” the first person said. He second person said the Mahindra Group would soon approach the ministry of Civil Aviation with its blueprint for the Airline.
In a June report, Aviation consultant Capa India said a couple of new Airlines were preparing for launch, but any meaningful capacity impact was unlikely until fiscal year (FY) 2017.
“We have not included Premier Airways (a start-up airline) in this projection which hopes to launch by the last quarter of FY2016. The proposed start-up continues to make significant progress towards its launch from a Hyderabad base, and most of its core team is now in place. However, we believe that a commencement of operations in 1Q (first quarter) 2017 is more realistic,” Capa said.
In addition, Capa said it understands that “serious projects in the pipeline include one major pan India Airline to be established as a joint venture with a foreign carrier, and a large regional carrier”.
Capa did not disclose the names.In the same report, Capa said that the losses of Indian Airlines could narrow by 40% in the current fiscal year. They are expected to post reduced losses of $680-750 million for the current fiscal year against $1.2-1.7 billion in the last fiscal year.
Low fare Airlines such as IndiGo and SpiceJet Ltd are expected to generate a combined profit of $200-220 million, while full service Airlines such as Jet Airways (India) Ltd and Air India Ltd could post losses of $900-950 million.
Indian airlines have lost more than $10 billion since fiscal 2009. Airline debt stands at around $11.3 billion, rising to close to $14 billion if liabilities to vendors are included. At an industry level, Airline debt is now equivalent to more than 100% of Airline revenue, and in the case of some carriers such as state-run Air India, it is more than 200% of revenue. For most Airlines, cash balance remains tight.
