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Indian Airlines to Incur Losses Up to $1.9b

Indian Airlines to Incur Losses Up to $1.9bIndian Airlines to Incur Losses Up to $1.9b

Indian airlines are expected to post combined losses of up to $1.9 billion this financial year led by full-service carriers like Air India and Jet Airways are driven by rising costs and low airfares, aviation consulting firm Corrective Action Preventive Action India said, IBTimes reported. The loss forecast for the 12 months ending March 31 is up from an estimated $430 million to $460 million sector-wide loss in January largely due to the depreciation of the rupee and a rise in oil prices, CAPA said. Ticket prices have not risen to compensate for higher costs, and CAPA said with the exception of Inter-Globe Aviation Ltd IndiGo, none of the airlines have strong enough balance sheets to comfortably withstand higher costs and lower yields. “Most carriers are ill-equipped to withstand cyclical downturns,” CAPA said. “Airlines have completely lost pricing power as a result of the rapid influx of capacity.” India is the fastest-growing domestic aviation market in the world and carriers have placed orders for hundreds of new Airbus SE and Boeing Co jets. But airlines have struggled to stay profitable despite filling nearly 90% of seats and seeing a more than doubling of domestic passenger numbers over the last four years.

 

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