"Considering the daily net loss of Rs 75-Rs 90 crore during the shutdown of operations and the expected weak demand, the Indian aviation industry
will require additional funding of Rs 325-350 billion (Rs 32,500 to 35,000 crore) over FY2021-23.
"The industry level debt is expected to increase to Rs 465 billion over FY 2021-22," Shah said.
In the forecast, Icra
has included an aggregate of all the five private sector players -- IndiGo, SpiceJet, GoAir, Vistara
India -- to make the balance sheet.
It may be mentioned here, that the disinvestment-bound Air India has parked nearly half of its total -- over Rs 60,000 crore -- debt into the SPV to make the heavily-leveraged balance sheet more attractive to the prospective buyers.
According to the rating agency, the aviation industry
is expected to report a negative 44 per cent growth in revenue for FY21 owing to an estimated 0.7 per cent growth in the domestic passenger traffic in the wake of the coronavirus
The profitability of the industry would also be adversely impacted in the ongoing fiscal due to lower revenues and high fixed costs, which is 35-42 per cent of the total cost of airlines.
According to Icra, the domestic traffic growth witnessed a seven-year low of 0.7 per cent in the previous fiscal, while the dip in the international traffic was much higher at a negative 13.5 per cent.
Stating that consumer sentiment is likely to be weak in adverse economic environment, Icra
said, the recovery in air travel is expected to be gradual once Covid-19 threat is allayed.
Overall, the industry is expected to witness a 41-46 per cent de-growth in domestic passenger traffic and 67-72 per cent de-growth in international passenger traffic for the domestic airlines in FY2021, it said.
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