May 9, 2021 1:17 am
-Advertisement-

Indian aviation may lose Rs 21,000 crore in FY21: ICRA

Must Read

The Indian aviation industry might see a net loss of Rs 21,000 crore in FY2021, against a net loss of Rs 12,700 crore in FY2020 due to lesser revenues and high fixed costs, credit rating agency ICRA has projected.

In a statement released recently, ICRA has said that the industry’s debt level will increase to Rs 50,000 crore (excluding lease liabilities) over FY 2021-22 and would require an additional funding of Rs 35,000 to Rs 37,000 crore over FY2021 to FY2023.

Following the Indian economy unlock, airlines’ losses have lessened a bit, ICRA said.

According to the statement, Kinjal Shah, Vice President, ICRA Limited, has said, “The two listed airlines have together lost Rs 31 crore per day during the first half of FY2021. As airlines gradually restart domestic operations, along with continued chartered and cargo operations, thereby resulting in significantly higher yields, 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.”

He added, “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 also forecasts that the continuous rise in the number of infections, and expectations of non-availability of a vaccine on a wide scale until H2 CY2021, will keep on impacting consumer willingness to travel and even business travel as businesses and corporations continue their work-from-home policy.

“ICRA thus 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,” Shah stated.

As international travel from India is unlikely to be allowed soon, ICRA expects the FY2021 international passenger traffic for Indian carriers to witness a significant YoY decline of 88-89%, higher than its earlier estimates of 67-72% decline.

Subscribe to receive the day's headlines from Tech Observer straight in your inbox

- Advertisement -

DISCUSSION

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
- Advertisement -

Latest in TECH

RELATED ARTICLES

- Advertisement -
0
Would love your thoughts, please comment.x
()
x