Mumbai: The Indian Hit Pandemi Flight Industry is expected to report a net loss of Rs 25,000-26,000 Crore while the debt level can increase to Rs 1.2 lakh crore in the ongoing fiscal year, the ICRA credit assessment agency said on Tuesday.
Also, this industry will require additional funds of Rs 45,000-47,000 Crore through FY2022 to FY2024, he said.
According to ICRA, in the near future, Indian operator balance sheets will remain stress until they are able to reduce their debt burden through a combination of operating performance improvements and / or through infusion of equity.
Thus ICRA maintains its negative credit prospects for the Indian aviation industry.
Most airlines have initiated a fundraising plan to install on the liquidity crisis that originated in cash caught fire because of the impact on demand and rising fuel prices jet, he said.
The aviation industry is expected to witness year-on-year growth of 45-50 percent in domestic air passenger traffic and 80-85 percent in international air passenger traffic for 2021-22, according to ICRA.
However, it will be achieved on a lower basis for the previous fiscal year and driven by a faster vaccination rate and gradual relaxation in restrictions by the Supervisory Authority.
However, its growth will still be far lower than the 2015-16-13-13 level, and this industry is expected to report higher net losses in 2021-22, said ICRA.
“Given the resurrection of the second wave of pandemic, the recovery of passenger traffic will only be gradual, with domestic passenger traffic it is expected to reach the pre-covid level only by FY2024,” said Kinjal Shah, Vice President and Co-Group Head, ICRA.
The price of ATF was elevated (higher by 71 percent of Y-O-Y in five months of FY2022) and tariff rates continued to cause challenges for the profitability of airline, he said.
“Therefore, the Indian aviation industry is expected to report a net loss of Rs 250-260 billion in FY2022.
The debt level will remain high for the industry and is expected to increase to around Rs 1,200 billion (including lending obligations) in FY2022, with industry that requires additional funds Rs 450-470 billion from FY2022 to FY2024, “Shah said.
Domestic air passenger traffic recovery depends on vaccination speeds, consumer willingness to travel recreational, recovery in macroeconomic growth, which in turn affects consumer sentiment and the ability to travel.
In addition, developments related to the limits of travel and quarantine norms mandated by the central and state governments, and recovery of business travel will also decide on the rate of recovery, said ICRA.
It states that the impact of the pandemic will be more profound and durable on international travel, compared to domestic trips, it is said that in addition to the recovery of international travel also depends on the opening of international operations scheduled for by the government.
In addition, macroeconomic shocks for the global economy and travel restrictions mandated by the government and quarantine norms from various countries will be a recovery determinant.
Significantly, international commercial flight services remain suspended since the end of March 2020.
This prohibition has now been extended until September 30.