The domestic airline industry is expected to post a net loss of about ₹7,800 crore in fiscal 2020 as against an estimated net loss of approximately ₹10,000 crore in fiscal 2019, credit rating agency ICRA said.

“Excluding Air India, the rest of the industry is expected to report a net loss of around ₹1,500 crore in fiscal year 2020 with a total debt of approximately ₹7,000 crore as on March 31, 2020. The industry’s prospects are expected to gradually improve, contingent on the movement in aviation turbine fuel prices,” said Kinjal Shah, Vice-President and Co-Head, Corporate Sector Ratings, ICRA.

Shah added, “Many of the industry players have weak balance sheet structure; and with continued losses in the near term, the industry will need approximately ₹20,000-22,500 crore equity infusion over the next three years.”

ICRA expects the domestic passenger traffic in fiscal year 2020 to be lower at 4.5 per cent, after five years of double-digit growth as many domestic airlines are focusing on expanding their international routes.

“Improvement in the core growth drivers like economic environment, tourism demand and regulatory support is essential for improved passenger traffic growth. Though there have been steps towards improving airport infrastructure, the pace of implementation remains a key concern,” ICRA said in a statement.