India's Kingfisher slips to third spot, IndiGo gains

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MUMBAI (Global Markets) - India's struggling Kingfisher Airlines (KING.NS) slipped in market share to the third position in October, from second in September, ceding ground to budget airline IndiGo, government data showed.

Kingfisher is unlikely to recover lost ground in coming months because the loss-making carrier has canceled scores of flights in November, catching both customers and government authorities by surprise and spooking investors.

Chairman Vijay Mallya said earlier this week Kingfisher canceled the flights to stop flying on heavily loss-making routes. Kingfisher has also said some aircraft were grounded for fleet reconfiguration after the airline decided to leave its low-cost business.

Kingfisher recorded a market share of 16.7 percent for October, a busy season for the airline industry, trailing IndiGo at 19.6 percent.

Kingfisher was almost neck-and-neck with state-run Air India, which had a share of 16.6 percent, while Jet Airways (JET.NS) remained the dominant carrier with a market share of 24.8 percent, which included its subsidiary JetLite.

Close on Kingfisher's heels was budget airline SpiceJet (SPJT.BO) with a share of 16.1 percent.

Domestic air traffic remained robust, growing 18.3 percent in Jan-Oct from the same period a year ago to 49.6 million passengers. But the numbers have failed to translate into profits for India's airline industry, where all the major carriers except IndiGo are loss-making, hit by high jet fuel costs and an inability to raise fares in a cut-throat market.

The Center for Asia Pacific Aviation (CAPA) has forecast a record $2.5 billion to $3 billion loss for Indian airlines for the year ending March 2012, with state-run Air India alone likely to account for more than half of it.

(Reporting by Aniruddha Basu; Editing by Paul Tait)