Air India, Jet Airways and SpiceJet are expected to report combined losses of $1.2 billion for the year ended March 31, 2013, according to the Centre for Asia Pacific Aviation (CAPA).

“…this figure could rise higher as a weak outlook for March could trigger further promotional pricing,” the research and advisory firm said in a report.

The spiralling cost of aviation turbine fuel coupled with other factors such as the economic slowdown, devaluation of the rupee and high operational costs have contributed to the current financial condition of the airline companies.

CAPA says that Air India would incur losses of about $700 million or ₹4,340 crore, which is about 20 per cent lower than the 2012-13 loss of ₹5,200 crore.

Jet and SpiceJet would report ‘record losses’ this fiscal, it says.

“In addition to their losses, Air India and Jet Airways are also likely to be impacted by travel agency defaults which have reached $40 million in Delhi in the recent weeks and could increase further,” CAPA said. An airline's exposure is partly or fully covered by bank or insurance guarantees collected from agents.

However, there could be cash flow issues if the agent cannot make the payment.

IndiGo is expected to report full year profits, while GoAir may end the year with ‘break even results’ or ‘modest profits’.

“IndiGo will be the only carrier to report full year profitability but this too will be significantly lower than our earlier estimates.

“Nevertheless, as the only consistently profitable airline in India the time may be approaching to leverage this achievement and an IPO is possible in fiscal 2015,” CAPA said.

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