Fuel costs, low yields to hit airlines’ profits

Mumbai: High aviation turbine fuel (ATF) and low yields are likely to impact profitability of major airlines in this quarter. With a market share of 31.2% in June, the net profits of Jet Airways is expected to dip by about 70% in the quarter ended June 2006 as against the last quarter, according to the analysts. Jet’s turnover for the quarter is pegged at Rs 1,650 crore while it is Rs 160 crore for SpiceJet. Aviation experts feel that SpiceJet, whose fiscal ends May 2006, is set to make a loss of Rs 45 crore. The operational loss of the company is expected to be Rs 13 crore on account of spiraling aviation turbine fuel prices. According to an analyst with a brokerage firm, SpiceJet will break even in the current fiscal.
Meanwhile, the newly listed Deccan Aviation is expected to make a higher loss than SpiceJet as the passenger load factors are below SpiceJet and the ramp up expenses of Deccan Aviation is also very high, add analysts.
17/07/06 Financial Express

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