Jet Airways (India) Ltd., the nation’s largest carrier, and SpiceJet Ltd. may return to profit next fiscal year on rising travel demand even as state-run Air India continues to lose money with ballooning debt.

India’s private airlines may have a combined $300-million profit in the year starting April 1, according to Kapil Kaul, chief executive officer of the Indian unit of the Centre for Asia Pacific Aviation. The carriers are benefiting from rising demand on a global economic rebound and they have slashed flights, shed jobs, cut salaries and handed routes to discount units to cut costs.

“Things are looking better,” Naresh Goyal, chairman of Mumbai-based Jet Airways, said yesterday at an aviation conference in Hyderabad, India. “We all have been rationalizing our capacity, and 2010 will be better than 2009.”

By contrast, Air India may lose as much as 30 billion rupees ($655 million), according to Kaul. Like state-controlled Chinese carriers and Japan Airlines Ltd., Air India has sought government aid as it flies unprofitable routes and faces growing competition from overseas carriers including Singapore Airlines Ltd.

“Reducing losses in the next three to five years will be extremely difficult for Air India,” Kaul said. An Air India turnaround “is not going to be the story next year.”

Indian and international air travel has rebounded from last year’s slump because of an economic pick-up. Domestic Indian travel jumped 23 percent in January to 4.1 million passengers, according to the Civil Aviation Ministry. Worldwide international airline passenger traffic rose 6.4 percent that month, to the International Air Transport Association.

“The last quarter of 2009 and early signs in 2010 give an indication that the worst could be over,” Indian Civil Aviation Minister Praful Patel said yesterday. “If the current growth is maintained, the Indian aviation sector is on a strong path of recovery by the beginning of 2011.”

Air India is still struggling amid the upturn as its debt had more than doubled to 152.41 billion rupees as of June after paying for 111 new planes ordered from Boeing Co. and Airbus SAS, according to Patel. The government last month approved an 8 billion rupees cash injection into Air India, which delayed salary payments for its 31,000 workers in June because of a cash crunch.

Arvind Jadhav, Air India’s managing director, said in August the airline will create four business units, slash capacity and pay debt to turn profitable in three years. Cargo, engineering services, ground handling and airline operations will be put into separate divisions, he said.

Weighed down by Air India and last year’s slump, the nation’s carriers will likely make a combined 70 billion rupees loss in the year ending March 31, according to Kaul. In the four years ending March, operational losses will likely total 260 billion rupees, he said.

India’s government, which doesn’t publish industry profit and loss data, is evaluating the “financial health” of airlines, the finance ministry said last month.

Private carriers have already taken cost-cutting measures. For instance, Jet, which had a record 4.7 billion rupees loss last year, and Kingfisher Airlines Ltd., owned by the nation’s biggest brewer, have handed flights to discount units and delayed new aircraft.

Capacity cuts also contributed to Indian airlines earning an average profit of $12 per passenger on the Mumbai-New Delhi route, the country’s busiest, in December compared with a loss of $70 per traveler in August, 2008, according to Boeing.

“The capacity and demand are matching and the airlines are getting the yields that are needed to make money,” said Dinesh Keskar, president of the planemaker’s India unit. “These things are good signs. The worst is over for the industry in India.” (Bloomberg)