India’s air traffic growth remains buoyant but airlines are still finding it tough to turn a profit.
The industry will likely post a loss in the 2019-20 fiscal year, according to aviation consultancy CAPA.
The big six carriers will post a combined net loss of more than $600 million.
These are budget carriers IndiGo, GoAir, SpiceJet, AirAsia India, and full service airlines Vistara and Air India.
In its quarterly aviation outlook report CAPA India said it is the ‘most significant downgrade within one quarter in more than 16 years.’
It says the airlines have failed to take advantage of Jet Airways’ demise earlier this year or reap the benefits of lower jet fuel prices.
"The potential benefits of consolidation and capacity rationalisation in the wake of Jet’s demise, and relatively benign fuel prices, have largely been squandered. Carriers pursued very aggressive expansion in an effort to capture slots released by Jet Airways, resulting in downward pressure on yields," it said.
As a whole Indian airlines have long struggled to turn a profit even during long periods of double-digit passenger growth.
They have too easily been sucked into price wars with only IndiGo turning a profit in the past few years.
