Delhi and Hyd airports to face downgrade
Mumbai: Moody's rating agency has said it is likely to reach Hyderabad and Delhi airports. Banning commercial flights for the 21 days and uncertainty about future growth amid the coronavirus pandemic will reduce air traffic, the aviation industry is expected to decrease 20-25% in fiscal year 21, according to. Both Delhi Airport (DIAL), which operates Indira Gandhi International Airport, and GMR Hyderabad International Airport Limited (HIAL), which operates Rajiv Gandhi Hyderabad International Airport (RGIA), repay loans from both aviation revenue and revenue sources non-aeronautical, which are linked to airport passenger traffic volumes and aircraft movements.
As such, the expected decrease in traffic will lead to a sharp reduction in airport revenue and cash flow over the course of fiscal year 21, Moody's said.
According to Spencer Ng, Moody's vice president and senior analyst, the sudden drop in flights and uncertainty about the timing and extent of the recovery have coincided with further debt issuance even as airports enter their peak phase of the expansion. While the current environment is unpredictable, Moody's expects a recovery in airport traffic to begin in the second half of the year. However, Moody's expects airport traffic levels for the next two to three years to be lower as a result of the coronavirus.
The scheduled national airlines have also started to face severe cash flow pressures, considering that the airlines will not work at all until April 14, 2020 and this is also leading to cut employee wages, apart from the other problems facing the industry. Even after the national closure, the rates of air operators will be very low considering the lack of air demand, which will also lead to the reduction of certain routes, Care Ratings said in a report.
“The growth of airline passengers will decrease sharply and will register a negative growth of 20% -25% for fiscal year 21. Passenger growth has been 13.7% during fiscal year 19 and 3.7% during fiscal year 20 (April-February), ”said the report.