Aviation sector needs Rs 20K cr equity infusion

The Indian aviation industry would need `200-225 billion (`20,000-22,500 crore) equity infusion over the next three years, as many players in the sector continue to have weak balance sheet structures on account of muted growth and multiple headwinds, and are expected to report losses in the near term, according to ICRA Ratings.

“Excluding Air India, the rest of the industry is expected to report net loss of ~`15 billion in FY2020 with a total debt of ~`70 billion as on March 31, 2020… Many industry players have weak balance sheet structure; and with continued losses in the near term, the industry would need ~`200- 225 billion equity infusion over the next three years,” said Kinjal Shah, vice-president and co-head, Corporate Sector Ratings, ICRA. “The two listed airlines (IndiGo and SpiceJet) have together lost ~`1.8 crore per day during H1 FY2020. However, this is lower than the `5.5 crore per day during H1 FY2019,” Shah added.