New Delhi: Jet Airways (India) Ltd, the country’s largest full-service airline, and SpiceJet Ltd, the second largest discount airline, are likely to report record losses for the fiscal year ended 31 March as higher fuel costs and the rupee’s depreciation took their toll, according to Capa Centre for Aviation.

State-owned Air India Ltd likely narrowed its loss and others may have earned profits, the consulting firm said in reply to a questionnaire ahead of earnings announcements expected in the coming days by Jet Airways and SpiceJet, India’s only two listed airlines.

Naresh Goyal-promoted Jet Airways, in which Etihad Airways PJSC of the United Arab Emirates bought a 24% stake last year for 2,000 crore, is estimated by Capa to have posted a group loss of between 2,100 crore and 2,200 crore in the fiscal year gone by. The loss in the fourth quarter alone is pegged at 500-600 crore.

“This loss (for the year) will be closer to the entire loss from FY07-FY13 combined and will almost wipe out the entire equity received from Etihad," Capa said in reply to an emailed questionnaire.

The debt-laden airline industry has been piling up losses as it reels under high costs, especially of fuel that makes up half its operating expenses, and rising airport fees in the face of slower economic growth.

Kingfisher Airlines Ltd was grounded in October 2012 under the weight of heavy debt and accumulated losses, compounded by protests by unpaid employees.

Last year’s depreciation of the rupee by 11% against the US dollar, a currency in which most airline costs are denominated, added to the pain.

Kalanithi Maran-promoted SpiceJet’s loss in the last fiscal year is pegged at around 1,000 crore by Capa, which estimated the loss in the fourth quarter alone at 275-300 crore.

Air India is expected to report a loss of 4,200-4,300 crore, “significantly lower" than the 5,100 crore loss in 2012-13. The loss is nearly half the record loss of 7,559 crore the airline posted in 2011-12. Integration of Air India’s domestic and international network, greater focus on customer service and on-time arrivals and departures, the deployment of new aircraft like the Boeing 787 for international flights, and moderation of capacity on both domestic and overseas routes has benefited the airline, Capa said, adding that a real turnaround was still some distance away.

IndiGo, promoted by Rahul Bhatia and Rakesh Gangwal, India’s largest airline by domestic market share, is expected to maintain its profit-making streak. IndiGo will report another profitable year in FY14, “but much lower than FY13 estimates…overall, (it) continues to be a top performer", Capa said. It didn’t specify an earnings estimate for the privately held airline, which earned a profit of 787 crore in 2012-13—the fifth consecutive year in which it made a profit.

Wadia Group-promoted GoAir is also expected to make a “modest" profit. GoAir, too, is privately held.

Competition in the airline industry is expected to intensify this year with Singapore Airlines Ltd and Air Asia Bhd preparing to launch operations in India with a full-service airline and a budget airline, respectively, both in joint ventures with Tata Sons Ltd.

Slower economic growth has hurt demand for air travel, forcing airlines in recent weeks to offer steep discounts for advance bookings to fill up seats.

“The demand is much lower than last year and we see further moderation in fares if demand continues to be below their modest expectations," Capa said. “We don’t see demand revival in first half of this fiscal."

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