Friday, December 13, 2019

Indian airlines likely to post loss of over $ 600 mn this fiscal: Report

New Delhi: Indian carriers are estimated to report a consolidated net loss of over $ 600 million (over Rs 4,230 crore) in 2019-20, according to aviation consultancy CAPA as it downgraded its full-year profitability projection made in June.
In June, it projected a consolidated net profit of $ 500-700 million in the optimistic case. Currently, there are four budget carriers and two full service airlines -- IndiGo, GoAir, SpiceJet, AirAsia India, Vistara and Air India.
In its quarterly market update report on aviation outlook FY2020, CAPA India said it is the “most significant downgrade within one quarter in more than 16 years”. The carriers are anticipated to post a consolidated net loss of more than $ 600 million this financial year, as per projection at the end of November.
The financial projections are based on the assumptions that oil prices are in the range of $ 60-65 per barrel, exchange rate is Rs 70-72 against $ and that airlines maintain pricing discipline.
Noting that it has revised downwards full-year profitability projections for all carriers, it said the industry has failed to capitalise on Jet Airways’ closure and relatively softer fuel prices, as evidenced by an estimated industry loss of $ 350-400 million in the second quarter of the current fiscal.
“The potential benefits of consolidation and capacity rationalisation in the wake of Jet’s demise, and relatively benign fuel prices, have largely been squandered. Carriers pursued very aggressive expansion in an effort to capture slots released by Jet, resulting in downward pressure on yields,” the report, dated December 12, said. About Air India, it said the airline’s privatisation is expected to be well underway before the end of FY 2020.
13/12/19 PTI/Business Line
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