The huge losses are because of high taxes on fuel and rising operational costs. Moreover, cutthroat competition in the sector prevents airlines from raising ticket prices.
Taxes constitute 40% of an airline's total expenditure, far above the global average of 32%. Besides, revenues barely cover operational costs.
For instance, operating margin for Kingfisher stands at 0.12 while it is negative for Jet Airways (-8 .25%) and Spice Jet (-6 .7%).
No comments:
Post a Comment