‘Indian airports may see ₹5,400 cr. net loss in FY21’

Passenger traffic drop hits sector: ICRA

With a sharp reduction in passenger traffic, estimated at about 66% year-on-year in FY21, the airport sector in India is expected to witness a significant net loss of ₹5,400 crore and cash loss of ₹3,500 crore during the year, says ICRA.

However, the robust liquidity of the players would help the sector sail through this unprecedented times, the rating agency said in a report.

ICRA said in the next financial year the industry is likely to report net profit of ₹190 crore backed by passenger traffic recovery by 130% year-on-year.

“In FY2022, the sector is expected to witness improvement in operating income by 73% to ₹14,500 crore and net profit to ₹190 crore supported by recovery in passenger traffic by around 130% y-o-y,” the report said.

The domestic passenger traffic is expected to decline by 61% Y-o-Y and international traffic by 85% Y-o-Y in FY2021, it said.

Shubham Jain, senior VP & Group Head, ICRA said, “With the subdued international traffic, which has higher yield per passenger when compared to domestic traffic, the revenues and profitability are adversely impacted in FY2021.”

“The sector is expected to witness a decline in operating income by 61% to ₹8,400 crore, while reporting an operating loss of around ₹1,700 crore [-20% margin] and net loss of ₹5,400 crore [-64% margin] in FY2021,” he added.

The overall cash loss for the sector is estimated at around ₹3,500 crore in FY2021, the report said.

“With such significant losses, the debt coverage metrics have deteriorated sharply. However, the liquidity of airport operators is robust with opening cash balances of ₹8,100 crore as on March 31, 2020 which has supported in meeting the operational expenses, debt obligations and equity requirements for capex,” it added.

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