Falling rupee puts pressure on Air India’s cost structure; int’l flights provide hedge: Company official

NEW DELHI: Falling rupee puts pressure on Air India’s cost structure and profitability but the airline has some natural hedge as it can charge more for international flights where tickets are priced in foreign currencies, according to a senior company official.

In recent weeks, Indian rupee has been on a decline and touched a record low of 86.04 against the US dollar on January 10. A weak rupee results in higher operational expenses for airlines as most of their costs are in dollars.

Air India’s Chief Commercial Officer Nipun Aggarwal said the declining rupee definitely poses a challenge to the industry and to Air India, and the situation has to be dealt with by improving productivity and taking other initiatives.