SpiceJet, Jet: Signalling Code Red

In the September quarter, airlines in the country were caught in a perfect storm. The rout of the rupee in July and August and high crude oil prices sent the cost of aviation turbine fuel soaring. Aircraft maintenance cost and airport charges also headed north.

The September quarter has traditionally been weak for aviation passenger traffic in the country, and the sluggish economy made matters worse. So, despite costs rising sharply, airlines could not pass them on.

On the contrary, offers to woo travellers meant that yields declined for some airlines. All these resulted in record losses – of Rs 894 crore for Jet Airways and Rs 559 crore for SpiceJet – in the September quarter. To put this in perspective, the quarter’s losses exceed, by a wide margin, the airlines’ full year losses in FY13 and are between 60 and 90 per cent of the losses in FY12, which is considered to be the worst year so far for Indian aviation.

Full report here Business Line


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