Falling rupee spells fresh trouble for airlines

New Delhi: A sagging rupee has compounded the problems of loss-making Indian airlines, as 35 per cent of their operating cost is in dollar terms.
The domestic currency on Tuesday closed at a new low of Rs 55.39 for a US dollar. It has shed 11.51 per cent value since February, increasing dollar-denominated expenditure by a similar amount, especially for carriers with less international operations.
Lease and maintenance rentals of aircraft, salaries to expatriate pilots, parking and landing rates at international airports and jet fuel prices are all dollar-denominated costs.
However, carriers like Air India and Jet Airways that operate a large number of international flights have been able to offset the impact of rupee depreciation by international revenues.
23/05/12 Mihir Mishra/Business Standard

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Categories: Indian Aviation- In General May 2012