Traffic soared on low fares as airlines bled on high fuel prices (2018 in retrospect)


Traffic soared on low fares as airlines bled on high fuel prices (2018 in retrospect)

Even as strong headwinds — soaring jet fuel prices and low yields — induced financial turbulence, the country’s civil aviation sector maintained robust traffic growth rate during 2018.

The double-whammy of high fuel cost and low fares necessitated by extreme competition magnified as the rupee depreciated and interest-rates remained high.

On an average, aviation turbine fuel (ATF) prices witnessed a year-on-year increase of 27 per cent during January-December 2018, while the rupee depreciated at an average of 5 per cent against the dollar during the same period.

According to industry observers, the rise in fuel costs was particularly acute for the Indian carriers as it makes up to 34 per cent of their operating expenses which is well above the global average of 24 per cent Read More

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