Airlines sag more with rupee slide

New Delhi: Red ink spreads as around a third of the operating cost of every airline is calculated in dollar terms.
The slide in the value of the rupee against the dollar is making the lives of airline companies, already beset with problems, a bit more difficult. Around a third of the operating cost of every airline is calculated in dollar terms.
Airlines with less international exposure are seeing more impact because of the absence of any dollar revenue. “With the depreciating rupee, our costs have increased by 10 per cent. We have no option but to observe this cost, at a time when the pressure on fares continue because of low fares by two airlines,” said a senior airline executive, who did not want to be identified.
The rupee has shed a little over 10 per cent in value since the last week of July. “Around 35 per cent of our costs are paid in dollars. Even as the payments for parking and landing at international airports are paid in the local currency, the charges are calculated in dollars, making it the same for us,” said another airline executive.
The lease rentals and maintenance rentals of aircraft, salaries paid to expatriate pilots, parking and landing rates at international airports and jet fuel prices are all dollar-denominated costs.
06/10/11 Mihir Mishra/Business Standard

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Categories: Indian Aviation- In General Oct 2011