Domestic airlines anticipate beneficial quarter as jet fuel prices fall 11.7%
Mumbai: Domestic airlines are anticipating another beneficial quarter this financial year, helped by the recent 11.7 per cent cut in jet fuel prices, a development that will help aviation companies sort out their balance sheet. Air turbine fuel (ATF) costs have gone down more than 40 per cent since the beginning of FY15. In fact, every 10 per cent reduction in fuel prices increases an airline's earnings before interest, taxes, depreciation and amortization (Ebitda) by 3-5 per cent, according to KPMG aerospace and defence partner and India head Amber Dubey.
"Airline Ebitda may improve 3-4 per cent in September 2015 over the previous month which can help pare debt, bring down interest cost and expand the airline fleet and network," said Dubey.
12/09/15 Neha Tyagi & Prabha Raghavan/Economic Times
