Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 4.0
Article rating: 5.0
Article rating: 3.3
Article rating: 5.0
RSS

News

Airline industry is in ’great stress’, says SpiceJet chief

Author: PTI/Tuesday, August 28, 2018/Categories: Aviation

Airline industry is in ’great stress’, says SpiceJet chief

New Delhi - The domestic airline industry is in "great stress" as it is grappling with high fuel prices and fall in rupee, SpiceJet chief Ajay Singh said today as he indicated that fares could go up in the coming months.

His comments come against the backdrop of high crude oil prices hurting the airline industry as Aviation Turbine Fuel (ATF) alone accounts for over 40% of a carrier's operational costs.

“Airlines across the world are suffering from high oil prices and in India we compound the problem with significant taxes as well.

“The depreciation of rupee has been a big issue... many of our costs are denominated in dollars. Of course, there is great stress in the sector," Singh said.

Despite the fact that India is the fastest growing aviation market in the world, it has been very tough to pass on the sudden increase in costs because things happened together -- the increase in oil prices and depreciation of rupee, he noted.

On why airlines are not able to increase fares, the SpiceJet chairman and managing director said it has all happened at a time when the season is a little weak.

"This is the seasonal fluctuation where as you know July, August, September is the weakest. Travel demand is little depressed at this time," he added.

Currently, Singh said that there needs to be at least "10-15 per cent increase in yields to cover existing costs".

He also said that in the coming months, the airline would make efforts to increase the yield.

Generally, yield refers to average fare paid per passenger.

"As travel demand becomes stronger, airlines will try to pass on certain cost increases they are incurring today. It is tougher to do in a season where demand is weak," he noted.

About delivery schedule of Boeing aircraft, he said the deliveries are pretty much on time.

"When you do aircraft production, you cannot have a firm date for a first aircraft. They have told us end August, beginning September. The aircraft is ready for delivery and we will soon take delivery in September," Singh said.

His response to a query about the airline looking to take delivery of Boeing 737 MAX aircraft.

Last year, the budget carrier placed an order for 205 Boeing 737 MAX aircraft.

Currently, the airline has a fleet of 36 Boeing 737NG and 22 Bombardier Q400 planes.

Print Rate this article:
No rating

Number of views (195)/Comments (0)

rajyashree guha

PTI

Other posts by PTI
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free