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India’s aviation industry will crash-land this fiscal with a revenue loss of Rs 24,000–25,000 crore, according to CRISIL.
In its advisory, CRISIL stated that airlines will be the worst-affected, contributing more than 70 per cent of the losses, or Rs 17,000 crore, followed by airport operators with Rs 5,000-5,500 crore, and airport retailers (including retail, food and beverages and duty-free) with Rs 1,700-1,800 crore.
That would reverse the trend growth of 11 per cent per annum the industry has logged over the past ten years, making it one of the most adversely affected sectors of the economy.
The extended lockdown to contain the Covid-19 pandemic, which has stalled traffic on the ground as in the air, is expected to lead to enormous losses on infrastructure industries in both sectors.
What’s worse, the losses will climb if travel restrictions last longer in hubs such as Mumbai, Delhi, Chennai and Kolkata. We expect the aviation sector will take at least 6-8 quarters to reach pre-pandemic levels.
A grinding halt
Transport sector is the backbone of an economy and the Novel Coronavirus (Covid-19) pandemic and the 40-day national lockdown it has necessitated has had a brutal impact on the sector.
With vehicles off the roads and airplanes off the skies, sectors such as highways and aviation - and the people whose livelihoods depend on it - have taken punches to the face. The International Air Transport Association, or IATA, foresees global aviation losses because of the pandemic at over $250 billion in 2020 alone. More than a third of this is expected in the Asia-Pacific region.
In India, the aviation sector, which grew in double digits over the past decade, is the worst affected.
The highways sector is also staring at significant losses because of lockdown restrictions, suspension of tolling, and project delays due to unavailability of labour.
With consumer demand at a low, infrastructure was expected to spur growth. But with the pandemic immobilising transport, chances of economic revival look bleak.
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