Coronavirus To Flatten India Aviation Industry: Crisil


The coronavirus outbreak and the subsequent lockdown has severrly impacted the domestic aviation industry. The expected revenue loss this fiscal to be around Rs 24,000-25,000 crore, as per a Crisil.

The Airlines sector will be the worst-affected segment, contributing more than 70 percent to the losses around Rs 17,000 crore.

Closely followed by the Airport operators who are likely to incur losses worth Rs 5,000-5,500 crore and finally, airport retailers will see a hit of Rs 1,700-1,800 crore, as per Crisil estimates.

This revenue fall would reverse the growth trend of around 11 percent per annum, which the industry has logged over the past ten years, wiping off the entire gain and making it one of the most adversely-affected sectors of the economy.

In case the lockdown and travel restrictions are extended, especially in the hubs such as Mumbai, Delhi, Chennai and Kolkata the agency is, projecting higher losses for the industry.

Crisil report expects the aviation sector to take at least 6-8 quarters to reach pre-pandemic levels. These are preliminary estimates, and aggregate losses could increase if the lockdown is extended beyond the first quarter. Even if the lockdown is gradually eased, the overall operational capacity will be at 50-60 percent for the rest of the fiscal.

Cricil expects mergers and acquisitions of airlines, and re looking of expansion plans of private and upcoming greenfield airports would be a clear risk.