Mumbai, June 17 -- The operating profit of domestic airlines is expected to decline 10-15 per cent in the current fiscal as elevated aviation turbine fuel (ATF) prices, airspace restrictions and rupee depreciation driven by the West Asia conflict continue to increase costs, according to a Crisil Ratings report released on Wednesday.

The report said the combined impact of higher operating costs, limited pricing power and capacity rationalisation is likely to reduce the aggregate operating profit of domestic airlines to Rs 16,000-17,000 crore this fiscal from around Rs 19,000 crore last fiscal.

According to Crisil Ratings, the West Asia conflict has led to a sharp increase in global ATF prices, which remain significantly above last fiscal...