SEBI Reg. Investment Advisor

Download App
Help Center Subscribe
Money Works 4 Me Logo MoneyWorks4Me
Talk to Advisor
Login Get Free Account
Sign Up

MoneyWorks4Me

Log In Sign Up Schedule Free 15‑min Call
Login Get Free Account
Sign Up
  1. Home
  2. Stock Market News
  3. Indian airlines may post steepest losses in a decade in FY19: Crisil Ratings

Indian airlines may post steepest losses in a decade in FY19: Crisil Ratings

02 Nov 2018 Evaluate

Credit ratings agency, Crisil Ratings in its latest report has said that Indian airlines may register steepest losses in a decade in the financial year 2018-19, in wake of higher aviation fuel prices and falling rupee. Pitching for a 12 percent hike in airfares to offset the increased costs, it also forecasts debt liability of three listed airlines to go up by 10 percent by FY19. It indicated that Aviation Turbine Fuel (ATF) alone accounts for 35-40 percent of a carrier's operational costs, while aircraft, engine rentals and maintenance costs, which are denominated in US dollars, together account for another 30-35 percent of the costs. 

According to the report, at an estimated Rs 9,300 crore, the industry's losses at EBIT (earnings before interest and tax) level would surpass the Rs 7,348 crore blow it was dealt in fiscal 2014 and that was followed by three good years through fiscal 2018, when carriers reeled in aggregate profit of Rs 4,000 crore on average at the EBIT level. Noting that the ATF prices are expected to average 28 percent higher on-year compared with FY18, it said such a hike will have a significant impact on the airlines' balance sheets. It added that the government has taken some measures to support the industry by reducing the excise duty on ATF or jet fuel to 11 percent from 14 percent earlier, but this will not materially curb the losses.

Crisil further said that on the other side, the rupee has declined by 13 percent against the dollar since March, which is expected to dealt a severe blow to the domestic airlines' financials. It pointed out that to offset the increase in operating cost, the industry will have to hike average fares by 12 percent, assuming there is no change in the passenger load factor (PLF) or seat factor. However, it said that the aggressive expansion plans of carriers and the race to maintain high PLFs will keep competitive intensity high and limit their ability to increase fares. Observing that the PLFs are highly sensitive to fares, it said that in the past three fiscals, benign ATF prices helped airlines keep fares stable.

Register Now to get our Free Newsletter & much more!
2026 ©The Alchemists Ark Pvt. Ltd. All rights reserved. MoneyWorks4Me® is a registered trademark of The Alchemists Ark Pvt. Ltd.

About MoneyWorks4Me

MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

Our Vision

To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.

What Makes MoneyWorks4Me Different

Our Approach: Ensuring compounding work its magic on client portfolio.

MoneyWorks4Me ensures this through: