NEW DELHI: Rating agency Icra has said Indian aviation industry could lose Rs 21,000 crore this Covid-impacted fiscal due to lower revenues and high fixed costs, against a loss of Rs 12,700 crore in the last financial year. The industry’s debt level will increase to about Rs 50,000 crore (excluding lease liabilities) over FY2021-22 and the industry will need additional funding of Rs 35,000-37,000 crore over FY2021 to FY2023, it added.
Icra vice-president Kinjal Shah said: “The two listed airlines (IndiGo and SpiceJet) have together lost Rs 31 crore per day during H1 FY2021. As the airlines gradually recommenced domestic operations, along with continued chartered and cargo operations, their daily cash burn started reducing. This resulted in a lower daily loss of Rs 26 crore for the two listed airlines in Q2 FY2021, against Rs 37 crore in Q1 FY2021. With a sequential improvement in domestic passenger traffic, and continued cost rationalisation initiatives by the airlines, further supported by the benign aviation turbine fuel (ATF) prices, the daily cash burn for airlines has further reduced in Q3 FY2021.”
“Icra expects FY2021 to witness a higher decline of 62-64% in domestic passenger traffic, than its earlier estimates of 41-46% decline. With this, the domestic passenger traffic will reach much lower than the FY2011 levels. The recovery in air travel is expected to be gradual once the Covid-19 threat is allayed,” she added.
The impact of the pandemic will be more profound and last longer on international travel compared to domestic travel. ICRA expects FY2021 international passenger traffic for Indian carriers to witness a y-o-y decline of 88-89%, higher than its earlier estimates of 67-72% decline.
“Due to the low base of FY2021, the passenger growth in FY2022 for both domestic and international operations will be robust; however, it will still be significantly lower than even FY2016 levels,” Icra added.
The rating agency maintains its negative credit outlook on the Indian aviation industry.
Source From : Times Of India