Press Trust of India
The domestic airlines industry is expected to post higher losses at $1.65-1.90 billion this fiscal year, up from projected $430-460 million, amid the headwinds due higher costs and lower yields, a report said.
Besides, airlines need to raise over $3 billion in the near-term based on the June quarter estimates, with full service carriers requiring around $2.6 billion and the low-cost peers needing $400 million, the India unit of Sydney-based Centre for Asia Pacific Aviation (CAPA) said on Monday in its Mid-Year Aviation Outlook 2019.
Full-service carriers are critically placed and could lose $1.75-2 billion in the current fiscal largely because of their uncompetitive cost base on domestic operations and a lack of profitability on international routes, it said.
Government-owned Air India, Jet Airways and Vistara are the three full-service domestic airlines.
Stating that traffic growth continues unabated but the financial outlook has deteriorated dramatically since January, the report said, “At that time (since January) CAPA India forecast a consolidated industry loss of $430-460 million, subject to oil remaining below $70/barrel and the US dollar exchange rate at ₹65-67.” “Our revised forecast is for an industry loss of $1.65-1.90 billion in FY19. These projections assume oil at $75-80/barrel and the exchange rate at ₹70-72,” it added.
CAPA estimates that though three budget carriers’ — IndiGo, GoAir and SpiceJet — full-year result is likely to range between break-even and modest profitability, the possibility of a full-year loss can’t be ruled out.
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