For airline operators, the rupee's slide comes as another blow at a time when the industry is grappling with high operating cost which has already compressed margins.
The rupee has declined over 11 percent since May and this will adversely impact airlines which incur 60 percent of their expense in dollar denomination.
Expat staff salary payments, aircraft lease rentals and purchase of aviation turbine fuel (ATF) will now get dearer as rupee is consistently weakening against the greenback. Interest on foreign currency loans will also get costlier.
Full service carriers like Jet Airways and Air India are ascertaining how much impact a weak currency will have on their financials. According to rough estimates, a Re 1 movement on fuel (ATF) purchases pushes their expenses by Rs 100 crore. Money market experts said the chances of rupee bouncing back soon are bleak and it could be a nightmare for capital intensive sectors like airlines.
21/06/13 Moneycontrol.com
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The rupee has declined over 11 percent since May and this will adversely impact airlines which incur 60 percent of their expense in dollar denomination.
Expat staff salary payments, aircraft lease rentals and purchase of aviation turbine fuel (ATF) will now get dearer as rupee is consistently weakening against the greenback. Interest on foreign currency loans will also get costlier.
Full service carriers like Jet Airways and Air India are ascertaining how much impact a weak currency will have on their financials. According to rough estimates, a Re 1 movement on fuel (ATF) purchases pushes their expenses by Rs 100 crore. Money market experts said the chances of rupee bouncing back soon are bleak and it could be a nightmare for capital intensive sectors like airlines.
21/06/13 Moneycontrol.com
