Aviation consulting firm CAPA India has reported Indian airlines NEW DELHI: Indian airlines, including full-service carriers like Air India and Jet Airways are expected to post combined losses of up to INR 1.9 billion this year, the firm said.
Losses are driven by rising costs and low air fares, aviation consulting firm CAPA India said.
The loss forecast for the 12 months ending March 31 has increased from an estimated USD to INR 460 million sector-wide loss in January largely due to the depreciation of the rupee and a rise in oil prices, CAPA said in a report released on Monday evening.
CAPA said ticket prices have not risen to compensate for higher costs. With the exception of Interglobe Aviation Ltd´s IndiGoNSE, none of the airlines have strong enough balance sheets to comfortably withstand higher costs a one of the airlines have strong enough balance sheets to comfortably withstand higher costs and lower yields.
CAPA estimates Indian airlines, including money-losing state-owned Air India Ltd, need an additional INR 3 billion of capital in the the near term to shore up their balance sheets.
The government in June said it had failed to attract bidders for a 76 percent stake in the national carrier, which is dependent on handouts to keep operating.
Jet Airways (India) Ltd last month reported a quarterly loss of INR 13.23 billion (USD 185.79 million) and said it was seeking to cut costs, inject capital and monetise its frequent flyer programme.
Budget carrier IndiGo, the country´s largest airline, in July reported its lowest quarterly profit in three years, with earnings down 97 percent due to rising fuel costs and foreign exchange losses.