Airlines Industry in India sees hope on the back of positive quarterly results

Spicejet posted Rs. 56.15 Crore while Jet Airways reported a profit of Rs. 24.7 Crore for June quarter; The bank expected them to turn profitable around March 2014

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Market leader Jet Airways and third-placed SpiceJet, which reported quarterly profits last week, were upgraded by Bank of America-Merrill Lynch to 'buy'.

For Indian aviation industry, the worst is behind them. Drastic flight cuts by the now struggling, former No.2, Kingfisher Airlines, has enabled the others to raise ticket prices.

The carriers should post smaller losses this financial year and turn profitable in the year ending March 2014, the bank said on Monday.

"The recent first-quarter results of SpiceJet and our own checking of ticket prices every two weeks suggests that pricing recovery has already started. Airlines appear to have achieved some ticket price hikes in the last three months," it said.

"We expect another hike may come during the third quarter, which is the peak season," Anand Kumar and S. Arun, analysts at Bank of America-Merrill Lynch, told his clients, as per a Reuters report.

Passenger yields on Jet's domestic flights rose about 9 percent in the quarter to end-June, while average revenue per passenger at SpiceJet jumped 24 percent. Yield is a measure of the average fare paid by passengers for a particular distance.

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