According to rating agency Icra the domestic aviation industry which has been impacted by corona virus pandemic situation and subsequent lockdown and shutdown will require an additional funding worth Rs 32,500 to 35,000 crore during FY21-23.
It also said the industry-level debt that expected to increase to Rs 465 billion (i.e. Rs 46,500 crore) over FY 2021-22.
The industry is predicted to report revenue de-growth of 44 per cent and a negative CAGR of 26 per cent in 2021-2023 as Kinjal Shah the vice chairman at Icra, said during a webinar on Thursday.
As Shah said – “Considering the daily net loss of Rs 75-Rs 90 crore during the shutdown of operations and therefore the expected weak demand, the Indian aviation industry would require additional funding of Rs 325-350 billion (Rs 32,500 to 35,000 crore) over FY2021-23. The industry level debt is predicted to extend to Rs 465 billion over FY 2021-22,” .
According to the rating agency, the aviation industry is expected to report a negative across 44 per cent growth in revenue for FY21 owing to an estimated 0.7 percent growth in the domestic passenger traffic in the wake of the corona virus pandemic situation.
The profitability of the industry would be adversely impacted in the ongoing fiscal because of the lower revenues and high fixed costs, which is 35-42 percent of the total cost of the airlines.
According to Icra, the domestic traffic growth witnessed a 7-year low of 0.7 percent in the previous fiscal, when the dip in the international traffic was much higher at a negative 13.5 per cent.
Overall, the industry is expected to witness about 41-46 percent de-growth in domestic passenger traffic and 67-72 percent de-growth in international passenger traffic for the domestic airlines in FY2021.