Indian airlines feel the pain as rupee plummets

NEW DELHI, India - Both airlines and passengers are facing the heat of the falling rupee, according to travel and aviation industry insiders.

Indian airlines feel the pain as rupee plummets

NEW DELHI, India – Both airlines and passengers are facing the heat of the falling rupee, according to travel and aviation industry insiders.

Airlines are also facing the heat because much of the payments they make is in US dollars. This is imposing a further burden on the cash-strapped ailing Indian aviation sector.

Just last week, the government had informed Parliament that the “airline industry in India suffers from huge debt burden close to $20 billion” as per 2011-12 estimates.

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Experts feel this situation is now bound to worsen. “Expenditure such as payment to expat pilots, lease rentals of aircraft, maintenance, repair and overhaul of aircraft abroad, external commercial borrowing and aviation turbine fuel costs are bound to spiral due to the falling value of the Indian rupee,” explained an aviation analyst.

“Passengers who plan leisure travel to the US are deciding to stop at Europe instead. Those who had planned to go to Europe are deciding on south-east Asia.

Those going to south-east Asia are deciding to travel within the country. Similarly, a traveller who wanted to spend five days abroad is now cutting it to three. The depreciation is badly hitting the entire travel industry,” said a travel agent.

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