All airline companies of India except IndiGo have suffered huge losses in the previous quarter due to falling yields. The falling profits have made the business of these airlines go down. All other airlines except IndiGo have been unable to cope up with problem of falling yields. While IndiGo topped the capacity with 30% increase on year-on-year basis in October 2018, the increase in rest of the sector was just above 9% only. This was less than the 18% y-o-y rise in June and 12.3% y-o-y rise in August.
Analysts have alleged that IndiGo is leveraging a strong balance sheet to gain market share and remain unfazed by falling yields. In October 2018, IndiGo’s share rose to an unbelievable 42.8%. In comparison, SpiceJet’s share rose to 11.7%, Go Air had 8.8% rise, while Air India’s share rose to 12.2%.
In September quarter, SpiceJet reported losses of Rs 389 crore while Jet Airways’s quarterly loss was Rs. 1,261 crore. “With oil prices down some 30% from peak levels to below $59 per barrel, and the rupee having retraced all the way back to Rs 69-70 levels, all airlines will breathe easier. However, IndiGo will benefit the most”, Financial Express quoted analysts as saying.
“In the current quarter (October-December), the average airfares are up as compared to last year. However, some of the rise in costs have been passed on passengers which was not the case in the previous two quarters,” Balu Ramachandran, Head – air and distribution, Cleartrip, told Financial Express.
