Falling Rupee Takes Toll on Air India's Profitability

Air India faces financial pressure due to a depreciating rupee, which raises operational costs. As an international operator, it can partly mitigate these costs by pricing flights in foreign currencies. However, industry competitiveness restricts fare hikes, affecting profitability.

Air India is grappling with a depreciating rupee that has heightened operational costs, though it partially offsets these by pricing international flights in foreign currencies, a senior official revealed this week.

The airline's Chief Commercial Officer, Nipun Aggarwal, highlighted the challenges posed by the falling rupee, which hit a record low of 86.04 against the US dollar. The majority of the airline's expenses are dollar-denominated, increasing pressure on profitability.

Aggarwal noted the stiff competition within the airline industry and its impact on pricing power, making it difficult for airlines to increase fares without affecting demand. Despite these hurdles, Air India continues its transformation efforts amidst growing air traffic.

(With inputs from agencies.)