Mumbai: With airlines entering into a near price war situation once again, domestic rating agency Icra on Wednesday said they should focus on securing their bottom lines by controlling costs, though it projected a better year ahead.
"While we expect the airlines to continue to sustain the improved performance in 2016-17 on account of favourable jet fuel prices and improving growth in passenger traffic, the industry is still subject to structural challenges and intense competition and therefore must focus on cost control to remain competitive on a sustainable basis by improving structural viability," Icra senior vice president Subrata Ray said in a note.
Since mid-May, airlines such as Air India, Indigo, GoAir, Spicejet and AirAsia India have come out with dirt cheap tickets despite the peak holiday season.
"Airlines need to ensure adequate liquidity position to protect themselves from unforeseen shocks such as demand slowdown or sudden spikes in jet fuel prices, which can put negative pressure on operating cash flows."
"The challenge is maintaining a pricing discipline under competitive pressures and possible cost headwinds," Mr Ray said.
It can be noted that 2015-16 was one of the best years for the aviation industry following a massive drop in fuel prices.
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"While we expect the airlines to continue to sustain the improved performance in 2016-17 on account of favourable jet fuel prices and improving growth in passenger traffic, the industry is still subject to structural challenges and intense competition and therefore must focus on cost control to remain competitive on a sustainable basis by improving structural viability," Icra senior vice president Subrata Ray said in a note.
Since mid-May, airlines such as Air India, Indigo, GoAir, Spicejet and AirAsia India have come out with dirt cheap tickets despite the peak holiday season.
"Airlines need to ensure adequate liquidity position to protect themselves from unforeseen shocks such as demand slowdown or sudden spikes in jet fuel prices, which can put negative pressure on operating cash flows."
"The challenge is maintaining a pricing discipline under competitive pressures and possible cost headwinds," Mr Ray said.
It can be noted that 2015-16 was one of the best years for the aviation industry following a massive drop in fuel prices.
To Read the News in Full
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