Airlines hurt by high fuel costs and competition

Three listed carriers may report a loss on an operating level despite a growth in revenue

Travel News
Travel News

India’s three listed airlines may have made losses in the quarter ended June, owing to high jet fuel prices, excess capacity and fierce competition for passengers, analysts said as per a report in Mint. Two of the carriers made profits in the last fiscal.

The quarter is considered the second best for domestic airlines, next to the October-December period, which is dominated by the holiday season. With cheap Air India tickets available on most routes, low-fare airlines have been hardest hit.

“On the operating level front, (it’s) not so good a quarter for the airlines sector,” said Rashesh Shah, analyst at Mumbai-based brokerage firm ICICI Securities Ltd. “All three companies are going to report a loss on an operating level even though the top line will continue to grow healthy.”

Listed carriers Jet Airways (India) Ltd, Kingfisher Airlines Ltd and SpiceJet Ltd together command a 60% market share. Jet Airways is estimated to have made a loss of Rs.335.8 crore, Kingfisher Airlines a loss of Rs.377.3 crore and SpiceJet a loss of Rs.75.5 crore, Shah said. This compares with a profit of Rs.8.4 crore for Jet Airways, a profit of Rs.55.22 crore for SpiceJet and a loss of Rs.187.35 crore for Kingfisher in the year-ago period.

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