Aviation firms stare at quarterly loss with rupee slide, higher fuel cost

A depreciating rupee has compounded the problems for companies grappling with high fuel prices in seasonally weak period

Aviation companies are faced with severe competitive pressure in a seasonally weak season, coupled with high oil prices straining their finances.

The price of jet fuel, 35-40 per cent of cost, rose 27 per cent more than a year before in the June quarter. Also, the rupee is falling against the dollar; after fuel, the next two high cost items of maintenance and rentals are dollar-denominated. Analysts estimate a 10 per cent increase in crude oil prices and a 10 per cent fall in the rupee has an impact of 8.5 to 10 per cent on the profit of airline companies.

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