The last few months have seen tailwinds converging for India’s airlines — such as improvement in demand and, therefore, passenger load factors (PLFs), a largely stable rupee-dollar exchange rate and, most importantly, a steep fall in crude oil prices. That would mean airlines are set to post their best operational performance in the last five years.
Over the next couple of years, airlines are unlikely to face significant cost pressures due to lower prices of aviation turbine fuel (ATF), which accounts for 40-45 per cent of players’ operating costs, and a range-bound rupee. However, the industry is saddled with high accumulated losses and a huge debt burden and will, therefore, see the current situation as a way out of the morass that it is currently in.
We expect only a marginal 2-4 per cent hike in ticket prices over the next couple of years, as airlines look to recoup their financial losses.
However, rising competition will keep the price increases under check as existing players look to protect their turf from the new players.
01/02/15 Rahul Prithiani/The Hindu
Over the next couple of years, airlines are unlikely to face significant cost pressures due to lower prices of aviation turbine fuel (ATF), which accounts for 40-45 per cent of players’ operating costs, and a range-bound rupee. However, the industry is saddled with high accumulated losses and a huge debt burden and will, therefore, see the current situation as a way out of the morass that it is currently in.
We expect only a marginal 2-4 per cent hike in ticket prices over the next couple of years, as airlines look to recoup their financial losses.
However, rising competition will keep the price increases under check as existing players look to protect their turf from the new players.
01/02/15 Rahul Prithiani/The Hindu
No comments:
Post a Comment