Iran war, rupee fall to push India airlines' losses to Rs 38,000 crore

India's aviation industry is estimated to post widened net losses of Rs 36,000-38,000 crore in the current fiscal year from Rs 28,000-30,000 crore a year ago, PTI reported on Thursday, citing ICRA, as a dip in passenger traffic, higher fuel prices weighed.

"The losses were primarily driven by moderation in passenger traffic growth, rising aviation turbine fuel (ATF) prices and forex losses arising from the sharp depreciation of the Indian rupee," the ratings agency said in the report.

The US, Israel-Iran war, which started in late February is expected to dampen air passenger traffic growth in FY27, the report added.


Moreover, higher costs due to the depreciation of Indian Rupee against the US dollar, elevated ATF prices and a rise in lease rentals amid continued aircraft deliveries are projected to cause a net loss of Rs 36,000-38,000 crore in this fiscal.

These cost escalations may not be adequately passed on to passengers through fare hikes, the report added.