The carrier is expecting to break even in 2010, Chief Executive Officer Wolfgang Prock-Schauer told reporters in New Delhi. The airline may also raise fares during the country's peak travel season that starts next month, he said. "Fuel is one key factor that's hitting us hard," Prock-Schauer said. "Also is the situation of overcapacity in Indian aviation."

An increase in capacity with the start of at least six new carriers in the past five years is boosting capacity and forcing down fares to below-cost levels. Jet fuel prices in Singapore trading have gained by a third in the past year, boosting the single-biggest cost for most airlines in Asia-Pacific. For some Indian airlines, fuel accounts for almost half of their costs, IATA's chief executive Giovanni Bisignani said in New Delhi.

"India is among the most expensive places on the planet to buy aviation turbine fuel," Bisignani said. One kilo-litre of jet fuel cost Rs 73,600 in Mumbai compared with the equivalent of about Rs 46,500 rupees in Singapore, he said. The 58 per cent difference "is robbing Indian airlines of their competitiveness," Bisignani said.

Mumbai-based Jet Airways, owned by billionaire Naresh Goyal, posted a loss of Rs 253 crore in the year ended March 31, compared with a profit of Rs 28 crore a year earlier, according to data compiled by Bloomberg. The carrier posted an operating loss in each of the past two years.

The airline's international operations won't be profitable this year, Prock-Schauer said. Jet Airways this year began flights to China, Hong Kong and the west Asia.