With a drastic reduction in passenger traffic at 6% per annum in FY15 in 2015, the airport sector in India is expected to incur a significant net loss of ₹ 5,400 crore and a cash loss of ₹ 3,500 crore during the year, says ICRA .
The rating agency said in a report, however, that the strong liquidity of the players would help the sector during this unprecedented time.
ICRA stated that the industry is expected to have a net profit of ₹ 190 crore supported by 130% year-on-year passenger traffic recovery in the next financial year.
The report states, “In FY 2022, the sector is expected to post a profit of 73% to ₹ 14,500 crore in operating income and% 190 crore in net profit, with passenger traffic decreasing by around 130%.”
Domestic passenger traffic is expected to decrease by 61% yo and international traffic by 85% in fiscal year 2021, it said.
ICRA Senior VP & Group Head Shubham Jain said, “When per-passenger traffic is higher than domestic traffic, revenue and profitability will be adversely affected compared to household income.”
It is expected that “operating income in this sector is expected to fall by 61% to 8,400 crores, while operating losses of around around 1,700 crores are reported. [-20% margin] And a net loss of ₹ 5,400 crore [-64% margin] In FY2021, “he said.
The report said that the total cash deficit of this sector in FY 2015 is around ₹ 3,500 crore.
“With such significant losses, debt coverage metrics have deteriorated rapidly. However, the liquidity of the airport operators is strong with opening of cash balance of ₹ 8,100 crore as on 31 March 2020, which has supported operating expenses, debt obligations and meeting the equity requirements for capex.
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