Why Indian carriers are losing money

OVER the past few weeks whispered advice has circulated among frequent flyers in India. Do not book any tickets in advance with Jet Airways, the country’s second-largest airline; it might not be long for this world. The suspicions had a grain of truth. On August 9th the carrier took the extraordinary step of delaying the planned release of its results for the three months to June. On August 27th it delivered the bad news—it lost $189m in the quarter, compared with a small profit in the same period of last year. It wants to raise capital to avoid running out of cash.

Jet Air is not the only Indian carrier to stall this summer. Airlines stocks have fallen even as Indian shares have performed decently overall (see chart). On August 14th SpiceJet, India’s fourth-largest carrier, announced a surprise loss of $5m in the second quarter. A month earlier IndiGo, India’s largest airline, posted a 97% year-on-year decline in net profits for the same period. And in June the government abandoned...



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