Elevated Aviation Turbine Fuel (ATF) prices and Rupee depreciation are likely to pose a serious threat to the recovery process for domestic carriers, credit ratings agency ICRA said on Wednesday.
In India, ATF accounts for around 45 per cent of the operational cost of an airline.
Besides, as much as 35-50 per cent of the airlines’ operating expenses are US dollar driven, as per ICRA.
An area of concern remains the ATF prices, which surged by around 77 per cent Y-o-Y in August, given the elevated crude oil prices due to geo-political issues arising from the Russian invasion of Ukraine, the ratings agency said.
