Mumbai: Jet Airways hopes to minimise the impact of sharp rupee depreciation by growing its international network over the next few months. In the short term however the airline will have to bear the double whammy - rising costs and the inability to pass them on due to tepid passenger demand in domestic market.
Lease rentals and maintenance costs of aircraft, salaries to expatriate pilots, global distribution system (reservation system) expenses, parking and landing costs at international airports are paid in dollars.
Also since crude oil import is paid for in dollars any fluctuation in the currency impacts aviation turbine fuel prices and hurts airlines.
Jet Airways has a natural hedge against dollar price movement as it earns over 30% of its revenue in dollars but it does not sufficiently cover its foreign currency expenses.
01/09/13 Aneesh Phadnis/Business Standard
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Lease rentals and maintenance costs of aircraft, salaries to expatriate pilots, global distribution system (reservation system) expenses, parking and landing costs at international airports are paid in dollars.
Also since crude oil import is paid for in dollars any fluctuation in the currency impacts aviation turbine fuel prices and hurts airlines.
Jet Airways has a natural hedge against dollar price movement as it earns over 30% of its revenue in dollars but it does not sufficiently cover its foreign currency expenses.
01/09/13 Aneesh Phadnis/Business Standard
