Mumbai: Jet Airways (India) Ltd hopes to minimise the impact of a sharp rupee depreciation by growing its international network over the next few months. In the short term, however, the airline will have to bear a double whammy - rising costs and the inability to pass there on to travellers due to a tepid demand in the domestic market.
Lease rentals and maintenance costs of aircraft, salaries to expatriate pilots, global distribution system (reservation) expenses, parking and landing costs at international airports are all 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 has a natural hedge against the dollar price movement as it earns over 30 per cent of its revenue in dollars, but it does not sufficiently cover its foreign currency expenses.
04/09/13 Aneesh Phadnis/Business Standard
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Lease rentals and maintenance costs of aircraft, salaries to expatriate pilots, global distribution system (reservation) expenses, parking and landing costs at international airports are all 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 has a natural hedge against the dollar price movement as it earns over 30 per cent of its revenue in dollars, but it does not sufficiently cover its foreign currency expenses.
04/09/13 Aneesh Phadnis/Business Standard
