New Delhi: State-run carrier Air India expects to report a loss of Rs2,000 crore for the fiscal year to March, its chairman said on Thursday, as rising fares and competition hurt.
However, Air India would add 14 aircrafts to its fleet of 154 this fiscal, Raghu Menon said.
“Because of air turbine fuel prices, fares are going up. Definitely there is a downturn,” Menon said.
Domestic jet fuel prices, which constitute up to 45% of an airline’s operating costs, have risen by 56% since the start of the year on the back of high crude oil. The surge in prices has led airlines to hike fares and trim routes, denting demand from leisure travellers.
But Menon said he expects fuel prices to fall in September.
“Public sector (oil) companies have indicated there will be a downward revision in September,” he said, citing lower oil prices which are down more than 20% from peaks hit in mid-July.
Menon said Air India was taking steps to increase revenues and cut costs, but did not give details.
Mint had on 18 August reported that Air India expected to save at least Rs1,000 crore in the year to March by cutting routes, outsourcing jobs and eliminating perks to senior executives.