CRISIL’s reports indicate a revenue loss of Rs 24,000–25,000 crore for the aviation industry in India.
Airlines will be the worst-affected, contributing more than 70% of the losses, or Rs 17,000 crore, followed by airport operators with Rs 5,000-5,500 crore, and airport retailers (including retail, food and beverages and duty-free) with Rs 1,700-1,800 crore. That would reverse the trend growth of 11% per annum the industry has logged over the past ten years, making it one of the most adversely affected sectors of the economy. What’s worse, the losses will climb if travel restrictions last longer in hubs such as Mumbai, Delhi, Chennai and Kolkata. CRISIL expects the aviation sector will take at least 6-8 quarters to reach pre-pandemic levels. Says Jagannarayan Padmanabhan, Director and Practice Leader, Transport & Logistics, CRISIL Infrastructure Advisory, “These are preliminary estimates, and aggregate losses could increase if the lockdown is extended beyond the first quarter. As and when operations resume, overall operational capacity will hover at 50-60% for the rest of the fiscal. Consequently, mergers and acquisitions of airlines, and relook at expansion plans of private and upcoming greenfield airports would be possibilities.”