With around 57 per cent growth expected in revenue in FY22 on the back of a likely higher passenger traffic, the domestic aviation industry’s net losses may reduce to Rs 14,600 crore from an estimated a net loss of Rs 21,000 crore this fiscal, ratings agency Icra said on Monday.
However, the ratings agency has maintained its ‘negative’ credit outlook on the Indian aviation industry. It expects debt levels to remain high in 2020-21 and 2021-22, and the industry may require a capital infusion of Rs 35,000 crore-37,000 crore between 2020-21 and 2022-23.
“With an improvement in passenger traffic in 2021-22, Icra expects the Indian aviation industry to report a year-on-year growth of around per cent 57 in revenues, with the industry’s net loss reducing to Rs 146 billion (Rs 14,600 crore) from an estimated net loss of Rs 210 billion (21,000 crore) in 2020-21,” said Icra Vice-President Kinjal Shah.
The rating agency said the financial year 2021-22 will witness a robust 78 per cent year-on-growth in domestic air passenger, owing to the low base of 2020-21, rising leisure travel and gradual opening up of corporate offices.
There is likely to be around 164 per cent growth in international air passenger traffic, assuming non-availability of COVID-19 vaccine on a wide scale up to the second half of 2021.
If a vaccine is launched earlier with reasonable availability, Icra said domestic air passenger traffic could witness a further upside in 2021-22, with an estimated growth of about 93 per cent. International air passenger traffic could witness an estimated growth of about 235 per cent.
The recovery in domestic air passenger traffic is contingent upon five factors containment of the spread of COVID-19; willingness of consumers to undertake leisure travel
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