Strong Re may cushion aviation sector’s losses

New Delhi: The stronger rupee is likely to bring some cheer to the redink spewing Indian aviation industry. Reeling under huge losses — expected to touch Rs 2,500 crore this year from last year’s Rs 2,200 crore — the local aviation industry could end up making cumulative gains of Rs 500-700 crore on an annual basis from falling dollar prices, say analysts.
According to industry sources, all airlines, especially the domestic carriers, are expected to rake in sizeable savings on the salaries paid to expat pilots, aircraft and engine maintenance and overhaul charges, aircraft lease and finance payments and the forever hurting aviation turbine fuel (ATF) costs. These comprise more than 80% of the top line expenses for all airlines.
Delhi-based SpiceJet’s chief financial officer Partha Sarathi Basu said: “The dollar rub-off is a big gain for us. We are making substantial savings as foreign currency transactions are involved in half our operations and the resultant benefits are to the tune of 3-4 % of our total operating costs.” The Rs 1,400-crore turnover airline is expected to gain a minimum Rs 30 crore on its foreign currency payments.
Analysts believe that the rupee benefit has been the best news for the otherwise loss making aviation industry.
23/02/08 Chanchal Pal Chauhan/Economic Times

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Feb 2008