Mumbai: With a depreciating rupee against the dollar and expected low passenger traffic, it is going to be an extremely tough quarter for the aviation industry.
The rupee, the worst performing currency in Asia, had dropped to a fresh lifetime low of 65.56 against the greenback on Thursday. On Friday, however, it recovered and closed at Rs 63.20 level against the dollar.
According to an analyst with a US-based equity firm, the second quarter is generally the worst quarter for the industry. And the weak currency situation is only going to add to that woe. “Around 60-65 per cent of airline company’s expenses are met through foreign exchange, to say, in dollar terms,” the analyst said, adding that the quarter is likely to see at least a five per cent decline in passenger traffic in this quarter.
Amber Dubey, partner and head-aerospace and defense, KPMG, said, “Around two-third of the expenses of the airlines are met in dollars, such as lease fees and even fees of expat pilots. So weakening of rupee has pushed the costs by almost 10-14 per cent".
Read News In Full 25/08/13 Soumonty Kanungo/mydigitalfc.com
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