Capacity addition likely to keep airlines’ yields under pressure: ICRA

New Delhi, June 6 (IANS) Ratings agency ICRA on Tuesday said the capacity addition by domestic airlines is likely to keep their yields under pressure.According to the ratings agency, the Indian aviati

New Delhi, June 6 (IANS) Ratings agency ICRA on Tuesday said the capacity addition by domestic airlines is likely to keep their yields under pressure.

According to the ratings agency, the Indian aviation sector, at present, has a sizeable order backlog of new aircraft, which is 1.78 times the current fleet size of the industry.

ICRA said it expects 17-20 per cent growth in industry’s ASKMs (available seat kilometers) during FY2018 backed by planned fleet addition of majority of the incumbents as well as new entrants, predominantly led by IndiGo.

“With expected FY2018 capacity addition, the downward pressure on yields is expected to continue, while the costs are not expected to decline, keeping the cost per ASKM (CASK) high,” said Anand Kulkarni, Assistant Vice President and Associate Head – Corporate Sector Ratings, ICRA.

This is published unedited from the IANS feed.