𝗠𝗶𝗱𝗱𝗹𝗲 𝗘𝗮𝘀𝘁 𝗖𝗼𝗻𝗳𝗹𝗶𝗰𝘁 𝗖𝘂𝘁𝘀 𝗔𝗶𝗿𝗹𝗶𝗻𝗲 𝗣𝗿𝗼𝗳𝗶𝘁𝘀
Indian airline operating profits will fall between 10% and 15% this fiscal year. A report from Crisil predicts domestic airline profits will drop to Rs 16,000-17,000 crore. This is lower than the Rs 19,000 crore recorded last year.
Key factors affecting profits:
- Aviation turbine fuel (ATF) prices increased by more than 50% due to the Middle East conflict.
- Fuel costs account for 40% to 60% of total operating expenses.
- The rupee depreciation increases the cost of fuel, aircraft leases, and maintenance.
- Lease rental expenses will rise by 15% to reach Rs 27,000-28,000 crore.
- Airspace restrictions create operational disruptions.
Global trends:
- IATA lowered global airline profit forecasts for 2026.
- Higher jet fuel prices and route disruptions affect the entire sector.
- Passenger demand remains high despite rising costs.
- Fares stay elevated due to capacity constraints and expenses.
Source: The Times of India