‘India’s airlines to report net loss of Rs 26,000 cr this yr, pre-Covid recovery only in FY24’
New Delhi: India’s aviation industry is expected to report a net loss of Rs 25,000-26,000 crore this fiscal with elevated jet fuel prices and fare caps continuing to pose a major challenge for the airlines’ profitability, according to domestic rating agency ICRA.
However, expected commencement of scheduled international operations and the waning ‘Omicron’ wave, will result in a notable recovery in passenger traffic in FY2023, it added. This will help the airlines post a reduced net loss of Rs 14,000-16,000 crore in the next financial year. The ratings agency also estimates that the industry will require an additional funding to the tune of Rs 20,000-22,000 crore during FY22-FY24.
ICRA expects domestic air passenger traffic to witness a strong y-o-y growth of 50-55 per cent in 2021-22 supported by the fast pace of vaccination and gradual relaxations in restrictions by the regulatory authorities. But this recovery will be on a much lower base of FY2021 and it will be significantly lower than pre-Covid levels. Recovery to precovid levels is only expected by FY2024.
