Mumbai: Low crude prices, increasing efficiency and rising air traffic will help the domestic airlines bring down their losses massively this fiscal to around Rs 5,500 crore from around Rs 8,500 crore last year, says an analyst report.
Operating performance of the domestic airlines is likely to improve even though concerns on their structural viability still remain, adds the report by domestic rating agency Icra.
"We expect the domestic airlines to continue to improve their performance in FY16 given the favourable jet fuel pricing environment. We expect their aggregate losses to further come down to around Rs 5,500 crore in FY16 from around Rs 8,500 crore in FY15," Icra said in a report.
As per the report, lower fuel cost, which accounts for about 50 per cent of operating expenditure for airlines, has resulted in 12-13 per cent reduction in operating cost. Between June 2014 and June 2015, crude prices fell nearly 55 per cent though it has since inched back to USD 50-55 a barrel.
22/10/15 PTI/Business Standard
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Operating performance of the domestic airlines is likely to improve even though concerns on their structural viability still remain, adds the report by domestic rating agency Icra.
"We expect the domestic airlines to continue to improve their performance in FY16 given the favourable jet fuel pricing environment. We expect their aggregate losses to further come down to around Rs 5,500 crore in FY16 from around Rs 8,500 crore in FY15," Icra said in a report.
As per the report, lower fuel cost, which accounts for about 50 per cent of operating expenditure for airlines, has resulted in 12-13 per cent reduction in operating cost. Between June 2014 and June 2015, crude prices fell nearly 55 per cent though it has since inched back to USD 50-55 a barrel.
22/10/15 PTI/Business Standard
