Even as strong headwinds - soaring jet fuel prices and low yields - induced financial turbulence, the country's civil aviation sector maintained robust traffic growth rate during 2018.
The double-whammy of high fuel cost and low fares necessitated by extreme competition magnified as the rupee depreciated and interest-rates remained high.
On an average, aviation turbine fuel (ATF) prices witnessed a year- on-year increase of 27 per cent during January-December 2018, while the rupee depreciated at an average of 5 per cent against the dollar during the same period.
According to industry observers, the rise in fuel costs was particularly acute for the Indian carriers as it makes up to 34 per cent of their operating expenses which is well above the global average of 24 per cent.
Consequently, the country's airline sector bled heavily. The second quarter earning results of listed airlines presented a gloomy picture.
Ratings agency ICRA gave a negative outlook for the industry, stating the strong passenger demand was offset by capacity additions leading to intense competition and continued pressure on yields.
28/12/18 Rohit Vaid/IANS/Economic Times
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The double-whammy of high fuel cost and low fares necessitated by extreme competition magnified as the rupee depreciated and interest-rates remained high.
On an average, aviation turbine fuel (ATF) prices witnessed a year- on-year increase of 27 per cent during January-December 2018, while the rupee depreciated at an average of 5 per cent against the dollar during the same period.
According to industry observers, the rise in fuel costs was particularly acute for the Indian carriers as it makes up to 34 per cent of their operating expenses which is well above the global average of 24 per cent.
Consequently, the country's airline sector bled heavily. The second quarter earning results of listed airlines presented a gloomy picture.
Ratings agency ICRA gave a negative outlook for the industry, stating the strong passenger demand was offset by capacity additions leading to intense competition and continued pressure on yields.
28/12/18 Rohit Vaid/IANS/Economic Times
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