ICRA estimates that the industry’s debt level will increase to Rs 50,000 crore (excluding lease liabilities) over FY 2021-22 and the industry would require additional funding of Rs 35,000 to 37,000 crore over FY2021 to FY2023.
ICRA also says that losses of airlines have reduced a bit post the unlocking of the Indian economy.
“With a sequential improvement in domestic passenger traffic, and continued cost rationalization 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,” Shah was further quoted.
ICRA predicts that the ongoing increase in the number of infections, and expectations of non-availability of a vaccine on a wide scale until H2 CY2021, will in turn continue to impact consumer willingness to travel and even business travel as businesses and corporates 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 further said.
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.
News Courtesy: ET