Wednesday, August 29, 2018

Cheap fares, costly fuel send India's airlines into a tailspin

Mumbai: Bargain-basement fares, high oil prices and a tumbling rupee are causing turbulence in India's hyper-competitive aviation market, virtually wiping out airlines' profits and leaving them scrambling to cut costs to survive.
India's aviation sector is expected to become the world's third-largest by 2025, with passenger numbers increasing six-fold over the past decade as a growing middle class take advantage of better connectivity and inexpensive flights.
But experts warn cheap tickets and an over-reliance on favourable fuel pricing is unsustainable.
India's top two airlines by market share, IndiGo and Jet Airways, and debt-laden state carrier Air India are all suffering financial woes, while SpiceJet's boss has said the industry is in "great stress".
"The rise in the price of Brent fuel, a depreciating rupee and a resulting mismatch between high fuel prices and low fares have adversely impacted the Indian aviation industry, including Jet Airways," Jet CEO Vinay Dube said this week.
29/08/18 AFP/Gulf News
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