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After record profits, airlines facing downwind due to rising costs

13 Nov 2023

Rising fuel costs, forex volatility, and stagnant demand are pulling the airlines back to the red compared to last year. IndiGo had posted record profit figures of ₹2,300 crore in the second half of FY2023.

Last year, several Indian carriers were enjoying the momentum carried forward from the second half of FY2023. IndiGo moved from a loss of ₹2,600 crore to a record profit of ₹2,300 crore in the second half of FY2023. In the first quarter of FY 2024, IndiGo moved past last year’s figures to post ₹3,000 crore profit. It cited better external factors and initiatives for operational improvements as key reasons.

However, Indian carriers are now facing a downwind due to skyrocketing fuel costs, lower yields, still demand, and forex volatility. In the second quarter of the current financial year, IndiGo posted a profit of ₹188 crore compared to the ₹3,000 crore profit in Q1.

Besides, other factors contributing to the airline woes are charges like the aircraft landing fee, parking fee, and Airport Development Fee (ADF) per passenger, which have soared very high in metro cities.

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