Indian Airlines Face Profit Crunch Amid Fuel and Forex Headwinds

The Indian aviation sector is bracing for a challenging fiscal year as a combination of volatile fuel prices, currency depreciation, and geopolitical tensions threatens to squeeze margins. A recent report by Crisil suggests that domestic carriers may see their operating profits decline significantly due to these mounting macroeconomic pressures.

Expected Decline in Operating Profits

According to a report released by rating agency Crisil, the combined operating profits of domestic airlines are projected to fall by 10% to 15% this fiscal year. The agency estimates that total operating profits could drop to between Rs 16,000 crore and Rs 17,000 crore, compared to the approximately Rs 19,000 crore recorded in the previous financial year. This downward trend is driven by a "triple whammy" of elevated Aviation Turbine Fuel (ATF) costs, airspace restrictions caused by Middle East conflicts, and the weakening of the Indian rupee.

The Dominance of ATF Costs and Geopolitical Risks

Fuel remains the single most significant variable in an airline's cost structure. Under normal operating conditions, jet fuel typically accounts for about 40% of an airline's operating expenses; however, during periods of extreme volatility, this figure can surge to nearly 60%.

The ongoing conflict in the Middle East has pushed global ATF prices more than 50% above pre-conflict levels. While prices have moderated from a peak of around $145 per barrel in early June to below $125 currently, they remain substantially higher than the previous fiscal year's average of $90 per barrel. Manish Gupta, deputy chief ratings officer at Crisil Ratings, noted that even with expected moderation, fuel costs will remain elevated compared to last year.

Currency Depreciation and Rising Lease Rentals

Beyond fuel, Indian carriers are facing intense pressure from foreign exchange volatility. Since a vast majority of airline expenses—including aircraft maintenance, fuel procurement, and lease payments—are settled in foreign currencies, the depreciation of the rupee has significantly inflated operating costs.

또한, 항공사들이 증가하는 수요에 대응하기 위해 공격적으로 기단을 확대함에 따라, 리스 임차료는 이번 회계연도에 약 15% 상승하여 약 27,000~28,000억 루피에 달할 것으로 예상됩니다. 이러한 고정비 상승과 수익성 둔화가 맞물리면서, 항공사들이 내부 유보금만으로 리스료를 상환할 수 있는 능력이 약화될 수 있습니다.

글로벌 맥락 및 회복력 있는 수요

인도 항공사들의 어려움은 더 넓은 글로벌 트렌드를 반영합니다. 국제항공운송협회(IATA) 또한 걸프 지역의 유사한 혼란과 항공유 가격 상승을 이유로 2026년 글로벌 항공사 수익 전망치를 하향 조정했습니다. 이러한 재무적 장애물에도 불구하고 긍정적인 면은 존재합니다. 바로 여객 수요가 놀라울 정도로 회복력을 유지하고 있다는 점입니다. 비용 상승과 공급 능력 제약으로 인해 항공권 가격은 높은 수준을 유지할 가능성이 크지만, 강력한 여객 성장세는 마진 압박 속에서도 지속적인 운영을 위한 토대를 제공합니다.

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