Tuesday, December 05, 2017

Domestic airlines expected to reduce losses this fiscal: ICRA

Domestic airlines are expected to reduce losses this fiscal riding on healthy seat occupancy coupled by a moderation in capacity, rise in tourism demand and economic environment, a credit rating agency said on Tuesday.
According to ICRA, improved tourism demand, supportive policy measures like the National Civil Aviation Policy and the Regional Connectivity Scheme (UDAN) and the start of economic revival are the key positives for the aviation industry.
However, it warned that inadequate aviation infrastructure, which has constrained the performance of airlines, remained a bottleneck.
The report said that rising seat occupancy supported by a decline in competitive intensity due to moderation in capacity addition and suspension of operations of three regional airlines has augured well for the industry profitability.
Kinjal Shah, ICRA assistant vice president and co-head (corporate sector ratings), said, "The increased ability of the airlines to pass on the costs to the customers due to reduced competitive intensity has resulted in an increase in the revenue per available seat kilometre (RASK) cost per available seat kilometre (CASK) spread for the airlines, and the financial performance of most of the airlines improved during the current year."
05/12/17 Shemin Joy/Deccan Herald