Experts have predicted that Indian domestic airlines will face losses in this financial year due to volatility in aviation fuel prices and depreciation of the rupee.
According to a report issued by the market evaluation agency Igra:
Aviation fuel (ATF) prices have increased. Also, the value of the Indian rupee against the dollar is depreciating.
Due to such reasons, the Indian Air Transport Companies in the current financial year will spend around Rs. 15,000 crore to 17,000 crore likely to incur a net loss.
The losses incurred by this sector in the last financial year are estimated to be around Rs.23,000 crore.
On March 31, 2023, the last day of this financial year, Indian domestic airlines will have to pay around Rs. 1 lakh crore debt is expected.
ATF fuel accounts for 45 percent of the operating costs of airlines. 35 to 50 percent of these companies’ operating costs are incurred in US dollars.
It is mentioned in the report that due to these two reasons, the volatility of fuel prices and depreciation of the rupee are causing huge losses to the airlines.