India's airlines could lose USD400-450 million in Q2 FY14 due to aggressive discounting

India's aviation industry continues to face increasing challenges as disappointing airline financial results in the three months ended 30 June 2013 (Q1FY14) are expected to deteriorate in Q2, traditionally the weakest quarter.

The current yield environment is particularly poor, with July yields down approximately 18-20% relative to the Q1 average, and August expected to see a further 5-8% decline.

The discounting appears to have been in vain as it has failed to stimulate the market and Q2 is likely to see only marginal year-on-year traffic growth. Load factors are similarly expected to see limited improvements.