FY17 is not going to be as good as FY18 for aviation: Kapil Kaul, CAPA South Asia

If you look at the growth in last three years which is over 20% and I see no reason why it cannot be closer to 20% in the next two years. I am quite certain that there is tremendous growth traffic upside going forward and this is not going to be only applicable to next two years. We are going to see next three to four decades of traffic growth. Our concern is not related to traffic growth. Our concern is related to infrastructure and that to me is critical challenge and I also sense that as we bring in capacity, the kind of capacities that we are bringing in, it may lead to an oversupply and especially and infrastructure is choking in most of your airports, the kind of supply that you would see starting from high eighteen could be a concern. The third concern is lowest cost environment in India.There is no question there will be lot of volume, significantly higher growth, capacity constraints would start becoming visible and more important the cost actually both in the fuel side as well as other non-fuel cost would be a concern. FY17 is not going to be as good as FY18 and we may see quarter two of FY18 giving the signal directionally that we may be heading for a little tougher time as the environment becomes difficult.  Read More…

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