Thursday, November 01, 2018

Airlines may post sharpest loss in a decade: Crisil

Mumbai: Indian airlines may post a decade-highest combined loss before interest and tax of Rs 9,300 crore in the ongoing financial year, according to estimates from ratings agency Crisil. Higher fuel costs and currency losses are expected to push airlines deep into the red this fiscal, reversing a three-year joyride.
At an estimated Rs 9,300 crore, the industry’s losses at EBIT (or earnings before interest and tax) level would surpass the Rs 7,348 crore blow it was dealt in fiscal 2014. That was followed by three good years through fiscal 2018, when carriers reeled in aggregate profit of Rs 4,000 crore on average at the EBIT level,” the agency said in a statement.
The agency attributed it to a “double blow” of rising fuel prices and a weaker rupee. With ATF (aviation turbine fuel) prices expected to average 28% higher on-year compared with fiscal 2018, “the impact will be significant”, it said.
The government has taken some measures to support the industry by lowering the excise duty levied on ATF by 300 basis points to 11%, but this will not materially curb the losses, it added.
Aircraft, engine rentals and maintenance costs, which are denominated in US dollars, together account for another 30-35% of the costs. The blow on this count is also expected to be severe given that the rupee has depreciated 13% against the dollar since March 2018, it said.
01/11/18 Anirban Chowdhury/Economic Times

To Read the News in full at Source, Click the Headline


Post a Comment