NEW DELHI: Failing to capitalise on Jet Airways’ closure and relatively softer fuel prices, Indian carriers are estimated to report a consolidated net loss of over USD 600 million in 2019-20, according to aviation consultancy CAPA.
The new projection is in sharp contrast to the previous projection it had made in June 2019. Five months back, when airfares were relatively higher on account of capacity crunch in the aviation market, CAPA had projected a consolidated net profit of USD 500-700 million for the ongoing fiscal.
CAPA India termed the projection as the most significant downgrade within one quarter in more than 16 years.
Last month, SpiceJet and IndiGo, the two listed carriers, have reported a loss of Rs 462.6 crore and Rs 1,062 crore respectively for the September quarter on account of new accounting norms, grounding of certain aircrafts and rise in total expenses. They, however, reported significant rise in the total revenue.
“The potential benefits of consolidation and capacity rationalisation in the wake of Jet’s demise, and relatively benign fuel prices, have largely been squandered. Carriers pursued very aggressive expansion in an effort to capture slots released by Jet, resulting in downward pressure on yields,” CAPA report said.
About Air India (AI), CAPA said its privatisation is expected to be well underway before the end of FY 2020. CAPA also revised its outlook for AI and said it may report loss of over USD 500 million against earlier estimation of USD 150 million.
“This deterioration in the outlook is a result of AI not having been able to fully take advantage of the opportunity available on international routes despite Jet’s exit and higher fares on international routes,” CAPA said.
Air India may report loss of USD 500 million
About the struggling and soon to be privatised Air India (AI), CAPA said the airline’s privatisation is expected to be well underway before the end of FY 2020.
CAPA has further revised its outlook for Air India and said the national carrier may report losses of more than USD 500 million as against earlier estimation of USD 150 million