Airlines fail to gain from fuel price cut, may lose USD 600 mn

In June, it projected a consolidated net profit of $500-700 million in the optimistic case.

Currently, there are four budget carriers and two full service airlines -- IndiGo, GoAir, SpiceJet, AirAsia India, Vistara and Air India.

In its quarterly market update report on aviation outlook FY2020, CAPA India said it is the “most significant downgrade within one quarter in more than 16 years.”

The carriers are anticipated to post a consolidated net loss of more than $600 million this financial year, as per projection at the end of November.

The financial projections are based on the assumptions that oil prices are in the range of $60-65 per barrel, exchange rate is Rs 70-72 against USD and that airlines maintain pricing discipline. Noting that it has revised downwards full-year profitability projections for all carriers, it said the industry has failed to capitalise on Jet Airways’ closure and relatively softer fuel prices, as evidenced by an estimated industry loss of $350-400 mn in the Q2 of the current fiscal.