Monday, September 17, 2018

More turbulence ahead for country's airlines

India's domestic air passenger traffic growth has come on the back of fiercely competitive pricing among Indian airlines to ensure tickets remain affordable. This has whittled revenue, a double whammy for the airlines at a time of rising operating costs because of increasing fuel costs and a depreciating rupee that has hit an all-time low of more than 72 rupees against the US dollar.

Aircraft fuel expenses have jumped more than 44 per cent from last year, in a country where aviation fuel is among the costliest in Asia because of high taxes.

A report on the Indian aviation industry released last month by the International Air Transport Association said Indian airlines have yet to match the financial improvements recorded by the global airline industry in the past three years. "This remains a work in progress for the industry and its key stakeholders, including policymakers," it added.

There are concerns that there could be more turbulence ahead. Indian airlines are expected to post combined losses of up to US$1.9 billion (S$2.6 billion) in 2018-19, said aviation consulting firm Capa India.
17/09/18 Debarshi Dasgupta/Straits Times

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