Domestic carriers will bleed heavily in the second quarter of the present financial year and the discounts offered by airlines have proved to be futile as they have failed to stimulate the market, a report by aviation consultancy firm Centre for Asia Pacific Aviation (Capa) has said.
The second quarter losses for the industry could reach $400-450 million (around Rs 2,400 crore-2,700 crore), it said.
The aviation consultancy firm said the continuing losses, high-cost environment and structural instability of the sector are likely to drive away the very few foreign airlines that have shown interest in investing in Indian carriers as the value proposition is weakening.
“A foreign airline could generate value from a transaction if the deal was accompanied by significantly enhanced market access which suits its strategic interests,” the report said.
Air India, it added, would account for the largest share of the losses.