<p>Indian airlines are expected to see a sharp drop in net losses to Rs 5,000-7,000 crore this fiscal as they continue to witness healthy passenger traffic growth and improvement in their revenue, rating agency ICRA said on Thursday.</p>.<p>The net loss would be much lower compared to the Rs 11,000-13,000 crore loss the industry is estimated to have reported for 2022-23 due to elevated aviation turbine fuel prices, coupled with the depreciation of the rupee against the US dollar, it said.</p>.<p>According to the rating agency, the domestic aviation industry continues to face challenges despite witnessing a healthy recovery in air passenger traffic because of sequential increase in aviation turbine fuel (ATF) prices and depreciation of the value of rupee against the US Dollar.</p>.Technical snags in aircraft: 338 cases reported by airlines this year till July.<p> It said domestic air passenger traffic rose 26 per cent to around 1.22 crore in July as compared to 97 lakh in the same month last year.</p>.<p> The outlook for the aviation sector is stable, on the back of fast-paced recovery in the previous fiscal and expectations of the trend continuing in 2023-24, ICRA said.</p>.<p>“(Last fiscal's losses) were much lower than the net loss of Rs 23,500 crore in 2021-22 and ICRA's earlier estimated net loss of Rs 15,000-17,000 crore for 2022-2023, driven by the improved ability of airlines to shore up yields without impacting demand,' it said.</p>.<p> “The net loss is expected to reduce further to Rs 5,000-7,000 crore in 2023-24 as airlines continue to witness healthy passenger traffic growth and improve their RASK-CASK spread through better pricing discipline,” ICRA said.</p>.<p> The trend is expected to continue as the industry regains some pricing discipline, coupled with a year-on-year decline in ATF prices since April compared to the last fiscal, ICRA said.</p>.<p> The average ATF prices were at Rs 95,906/kilo litre in the first five months of this financial year as against Rs 1,21,013/kilo litre in FY23 and Rs 64,715/kilo litre in FY2020, according to ICRA.</p>.<p> Further, some airlines have foreign currency debt, ICRA said, adding that while domestic airlines have a partial natural hedge to the extent of earnings from their international operations, overall, their net payables are in foreign currency.</p>.<p> The airlines' efforts to ensure fare hikes, proportional to their input cost increases, will be the key to expanding their profitability margins, it said. </p>
<p>Indian airlines are expected to see a sharp drop in net losses to Rs 5,000-7,000 crore this fiscal as they continue to witness healthy passenger traffic growth and improvement in their revenue, rating agency ICRA said on Thursday.</p>.<p>The net loss would be much lower compared to the Rs 11,000-13,000 crore loss the industry is estimated to have reported for 2022-23 due to elevated aviation turbine fuel prices, coupled with the depreciation of the rupee against the US dollar, it said.</p>.<p>According to the rating agency, the domestic aviation industry continues to face challenges despite witnessing a healthy recovery in air passenger traffic because of sequential increase in aviation turbine fuel (ATF) prices and depreciation of the value of rupee against the US Dollar.</p>.Technical snags in aircraft: 338 cases reported by airlines this year till July.<p> It said domestic air passenger traffic rose 26 per cent to around 1.22 crore in July as compared to 97 lakh in the same month last year.</p>.<p> The outlook for the aviation sector is stable, on the back of fast-paced recovery in the previous fiscal and expectations of the trend continuing in 2023-24, ICRA said.</p>.<p>“(Last fiscal's losses) were much lower than the net loss of Rs 23,500 crore in 2021-22 and ICRA's earlier estimated net loss of Rs 15,000-17,000 crore for 2022-2023, driven by the improved ability of airlines to shore up yields without impacting demand,' it said.</p>.<p> “The net loss is expected to reduce further to Rs 5,000-7,000 crore in 2023-24 as airlines continue to witness healthy passenger traffic growth and improve their RASK-CASK spread through better pricing discipline,” ICRA said.</p>.<p> The trend is expected to continue as the industry regains some pricing discipline, coupled with a year-on-year decline in ATF prices since April compared to the last fiscal, ICRA said.</p>.<p> The average ATF prices were at Rs 95,906/kilo litre in the first five months of this financial year as against Rs 1,21,013/kilo litre in FY23 and Rs 64,715/kilo litre in FY2020, according to ICRA.</p>.<p> Further, some airlines have foreign currency debt, ICRA said, adding that while domestic airlines have a partial natural hedge to the extent of earnings from their international operations, overall, their net payables are in foreign currency.</p>.<p> The airlines' efforts to ensure fare hikes, proportional to their input cost increases, will be the key to expanding their profitability margins, it said. </p>