New Delhi: With nearly 70% to 75% of their operational cost tied to the US dollar, most Indian carriers say that they could be facing one of their worst quarters after a long time. Especially at a time when competition and a non-peak travel season has forced them not to hike fares at all.
50% of the operational costs of most airlines especially the LCCs are due to ATF fuel which is imported and is pegged to the dollar.
Another 20% to 25% of their total operational cost is due to lease rentals for the planes which have to pay in dollars as well spare parts for maintenance which are again imported.
“What we are seeing is worse than in 2008 because at that time the rupee was at around Rs 43 to a dollar even through ATF fuel prices had hit a high of $140 a barrel which is now at around $109 to US 110. But with rupee at 63 and expected to go up to even 70, our fuel costs as well as the cost of paying lease rentals and importing spares could be higher than in n 2008. This quarter would be the worst in recent times” says a top executive of a leading LCC in the country.
Read news in full 21/08/13 Surjeet Das Gupta/Business Standard
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