Business Standard

Capacity addition likely to keep airlines' yields under pressure: ICRA

Image

IANS New Delhi

Ratings agency ICRA on Tuesday said the capacity addition by domestic airlines is likely to keep their yields under pressure.

According to the ratings agency, the Indian aviation sector, at present, has a sizeable order backlog of new aircraft, which is 1.78 times the current fleet size of the industry.

ICRA said it expects 17-20 per cent growth in industry's ASKMs (available seat kilometers) during FY2018 backed by planned fleet addition of majority of the incumbents as well as new entrants, predominantly led by IndiGo.

"With expected FY2018 capacity addition, the downward pressure on yields is expected to continue, while the costs are not expected to decline, keeping the cost per ASKM (CASK) high," said Anand Kulkarni, Assistant Vice President and Associate Head - Corporate Sector Ratings, ICRA.

 

--IANS

rv/dg

Disclaimer: No Business Standard Journalist was involved in creation of this content

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jun 06 2017 | 6:44 PM IST

Explore News