Air India Express is expected to report lower profit this fiscal owing to decline in yield and higher fuel prices.
The reduced demand for travel to the gulf region, which is a key market for the international budget arm of the national carrier Air India, is also expected to be a contributing factor in the likely slump in profit, sources said.
Air India Express had turned into black for the first time since its inception last fiscal posting a record profit of Rs 362 crore primarily on account of a reduced fuel cost and higher number of passengers.
"We are likely to see a lesser profit in this fiscal, which is expected to be around Rs 300 crore owing to several reasons," airline sources told PTI here.
According to sources, while the yield has declined by 15-20 per cent during the fiscal as competition prevented the airline to increase fares, the oil prices on the other hand saw a 10 per cent jump compared to last year.
Yield is an indicator of money earned from a flight.
"Then, we also saw a decline in demand on the Gulf routes due to the prevailing economic situation in the region following slump in oil prices,' sources said.
All these factors are expected to result in reduced profitability for the airlines this fiscal, they said.
Disclaimer: No Business Standard Journalist was involved in creation of this content
