Skift India Report: Strong Recovery and Reduced Losses for Aviation Industry
Photo Credit: Credit rating agency ICRA maintains a stable outlook for the Indian aviation industry. Flickr / abhirupsen_haldia
Skift Take
Amidst signs of resilience and revival, ICRA's report also highlights the financial strain that some airlines are under, despite incremental improvements. The Indian aviation sector, characterized by intense competition, high operational costs, regulatory issues, and market volatility, has historically been a challenging business environment for airlines.
Due to the swift rebound in domestic passenger traffic, credit rating agency ICRA maintains a stable outlook for the Indian aviation industry. The agency anticipates that this recovery will persist through the latter half of the financial year.
ICRA predicts a reduction in the industry's net losses, estimating them to be in the range of INR 30-50 billion for fiscal year 2024. This marks a substantial improvement compared to the INR 170-175 billion net losses in the preceding fiscal year.
While certain airlines benefit from solid financial backing and liquidity, thus supporting their creditworthiness, others continue to experience financial strain, albeit with some modest improvement compared to recent years, ICRA noted in its latest report.
Domestic air passenger traffic for September was estimated at 12.3 million, 1.3% lower than 12.4 million the month before.
However, ICRA noted that this is growth of 19% from the same period last year and
