Aviation

COVID-19 impact: Indian aviation sector may incur $3.3-3.6 bn loss in Jun quarter:, says CAPA India

Updated : March 26, 2020 06:09 AM IST

The projections are based on the assumption that all domestic and international operations remain grounded until June 30, 2020, CAPA India said.

Most Indian airlines have not structured their business models to be able to withstand even regular shocks, such as elevated fuel prices or economic downturns, let alone once-in-a-century events

Indian aviation sector is projected to incur a staggering USD 3.3-3.6 billion loss in the first quarter of the next financial year if flight services remain grounded till June-end, according to a report.

Aviation consultancy CAPA India on Wednesday also said there is a need for a coordinated national aviation industry response to the current situation.

India has suspended operation of commercial flights till April 15 as part of larger efforts to prevent spreading of coronavirus infections.

In a report, CAPA India said airlines are expected to post a loss of around USD 1.75 billion while that of airports and concessionaries could be USD 1.50-1.75 billion. Ground handlers are estimated to post a loss of USD 80-90 million.

Together, the loss for the sector is anticipated to be USD 3.3-3.6 billion in the first quarter of the next financial year. At current exchange rates, the amount translates to around Rs 25,000 to 27,000 crore.

The projections are based on the assumption that all domestic and international operations remain grounded until June 30, 2020, CAPA India said.

The first quarter of next fiscal -- 2020-21 -- is from April to June.

"The extension of the domestic lockdown until at least 15-Apr-2020 is the right decision by the Government of India. However, it has ensured that aviation will be seriously impacted by COVID-19. The April-June quarter, traditionally one of the stronger quarters of the year for Indian airlines, is increasingly looking like it will be a washout," the report said.

Further, it said that most Indian airlines have not structured their business models to be able to withstand even regular shocks, such as elevated fuel prices or economic downturns, let alone once-in-a-century events.