Domestic airlines have posted combined losses of $470-550 million in the second quarter of the current fiscal, traditionally a weak quarter for airlines, according to Centre for Asia Pacific Aviation, or CAPA.

In its latest estimates on airline profitability released on 23 October, Capa said Indian carriers had returned to making losses in the second quarter because of significant structural challenges. “However, it was also observed that airlines maintained pricing discipline and were prepared to sacrifice load factors rather than compromise yields, which were higher than the corresponding period last year,” Capa said in its report.

Capa estimated a loss of $280-320 million for national carrier Air India Ltd, $2.5-2.8 million for GoAir, $45- 60 million for Jet Airways, $110-130 million for Kingfisher Airlines and $25-28 million for SpiceJet. Capa said the country’s largest carrier by passengers carried IndiGo is estimated to either break-even or post losses of around $5.7 million.

Capa said that assuming the price of Brent crude at an average of $110 per barrel and an exchange rate of Rs52-53 to the dollar, Air India will post a loss of $189-226 million for the third quarter ending 31 December 2012. Other carriers are expected to post a profit in the December quarter. GoAir is estimated to post a profit of $7.5 to 9.4 million, IndiGo $47 to 57 million, Jet Airways $38-47 million and SpiceJet $25-28 million.

The structural challenges will remain, though, the consulting firm said. “Despite the projected strength of the market in Q3, the hostile cost environment – some of which management has limited control over, such as the cost of fuel and the depreciation of the Rupee - continues to impact all carriers,” Capa said.

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