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Indian Aviation Industry Could Face A Revenue Loss Of INR 24,000 Crore

Airline flights have been suspended since March 24, with only cargo flights and repatriation flights currently being operated. With the lockdown extended to contain COVID-19 pandemic, there has been a bit of speculation about the so-called “crash-landing” of the Indian aviation industry.

According to a prediction made by the global analytics company CRISIL in a recent report, the domestic aviation industry is expected to have a revenue loss of INR 24,000 crore to 25,000 crore. This number is expected to further increase if travel restrictions last longer in hubs like Mumbai, Delhi, Chennai and Kolkata, added the company.

air travel
Airplane at the airport warning sign coronavirus

Airport operators are likely to suffer losses worth INR 5,000-5,500 crore and airport retailers (including retail, food and beverages and duty-free) will see a hit of INR 1,700-1,800 crore added CRISIL.

Such a loss is said to reverse the trend growth of roughly 11% per annum, which the industry has seen in the past ten years, making it one of the most affected sectors of the economy. Jagannarayan Padmanabhan, director and practice leader, transport & logistics, CRISIL Infrastructure advisory added “ these are preliminary estimates, and aggregated losses could increase if the lockdown is extended beyond the first quarter. As and when operations resume, overall operational capacity will hover at 50-60% for the rest of the fiscal”.

It’s Not Just The Aviation Industry.

3 cyclists on the barren plateau of Tibet
Image source: longrodehome.com

Similarly, the road and highway sector is expected to see developers and toll operators incurring toll revenue losses of INR 3,450-3,700 crore during March-June, the report added. The National Highways Authority of India (NHAI) will lose 2,100-2,22 crore in toll taxes during this period.

Stakeholders will also suffer losses on account of accrued interest, increase in costs of under-construction projects, time overruns, and a rise in disputes between the private sector and government authorities.

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