Indian carriers set to fly into profit zone in Oct-Dec quarter

Most Indian carriers are likely to report profits in the October-December quarter on the back of falling global crude prices and financial problems plaguing SpiceJet, which saw the budget airline drastically scale down operations.
Global crude prices have plummeted by almost 60% — from $110 a barrel in June 2014 to close to $45 per barrel. Aviation turbine fuel (ATF), or jet fuel, is the single-largest element contributing to airlines’ costs in India and accounts for nearly 50% of the operating cost of the carriers.
Indian carriers could save up to $400 million (Rs 2,480 crore) in 2014-15 on account of lower fuel prices, aviation consultancy firm Centre for Asia Pacific Aviation (CAPA) has said. CAPA estimates Jet Airways will post a profit of Rs 120-180 crore during the October-December quarter, which excludes all extraordinary one-time costs including profits from the slump sale of it’s frequent flier programme. Jet had reported a loss of Rs 267.89 crore in the corresponding quarter of 2013.
Both IndiGo and GoAir will be profitable in the third quarter, CAPA said. “December was the best-performing month for all carriers — both yields and passenger load factors rose due to SpiceJet’s challenges,” said Kapil Kaul, South Asia CEO of CAPA.

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