Data | Despite increase in flyers, Indian airlines struggle to turn a profit

Due to increased fuel prices, the airline industry has not recovered from the losses caused by the pandemic, despite an increase in passenger traffic after the pandemic restrictions eased

NEW DELHI, 16/04/2012: An Indian Oil Aviation fuel tanker seen with a row of Aircrafts at the IGI domestic terminal, with the recent permission being granted to airlines to import ATF or aviation fuel, this marks another positive step to liberate private Indian airlines from the financial complications they have got into. Though India's skies opened up long ago and private carriers have overtaken Air India and Indian Airlines in many respects with finacial constraints, in New Delhi. Photo: V.V. Krishnan | Photo Credit: KRISHNAN VV

The aviation industry is caught between a rock and a hard place. During the three COVID-19 waves, as the number of passengers reduced drastically, losses incurred by airlines in India increased. But despite the massive reduction in the number of flights operated, aviation firms continued to pay salaries, airport fees, aircraft and engine rentals. So, while revenues dried up, their expenses remained the same. Between the waves, movement restrictions were eased in varying degrees and passenger traffic increased. The number of flyers surged, especially after the Omicron wave ended. But so did the price of aviation fuel. As fuel prices have affected profits, the industry’s recovery from the pandemic is delayed. Thus, despite an increase in passenger traffic, airline firms continue to suffer

Profit-loss statement

The graph shows IndiGo and SpiceJet’s profit/loss made after tax in ₹ ‘000 million. Even before the pandemic outbreak, airlines were making losses due to poor economic conditions

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After the outbreak, their losses increased. Now, despite the surge in passenger traffic, airlines are yet to come out of the woods as jet fuel prices are skyrocketing

 Passenger and fuel consumption

The chart shows the passengers carried in lakh (right axis) and fuel consumption in thousand tonnes (left axis). During the three COVID-19 waves, both the numbers crashed

With each passing wave, the dip in passenger traffic became moderate and the recovery was quicker. But with the increase in passengers also came the increase in fuel consumption

Expenses during pandemic

The chart shows airlines’ expenses on employee benefits, aircraft and engine rentals and airport fees. During the first two COVID-19 waves, despite the drop in passenger traffic, airline firms continued to bear high expenses

Fuel price and expenses

The charts show aviation turbine fuel (ATF) prices in ₹ per kilo litre in Delhi and fuel expenses of IndiGo and SpiceJet in ₹ ‘000 million. Aviation turbine fuel has crossed the ₹1 lakh per kilo litre mark in March for the first time in history. The prices increased due to surging crude prices and may stay the same for some time due to the Russia-Ukraine war

With inputs from Naomi Lawrence, Padmaja Ravi, Preethi B. and Shubhakarini K.S.

Source: Directorate General of Civil Aviation, BSE