Industry

Airlines in India may post $4.1 bn loss in FY22: CAPA

Airlines in India are likely to post a consolidated loss of $4.1 billion in financial year (FY) 2022, forecasts aviation consultancy CAPA.

This sum is similar to the losses for the financial year 2021, taking the total losses for the two years since the pandemic to $8 billion.

Airlines may require almost $5 billion in recapitalisation in FY22, out of which $1.1 billion is in the pipeline in the form of IPOs, QIPs and other instruments, says CAPA.

After a steep dive in passenger traffic in April and May following a surge in COVID-19 cases, June is likely to see a moderate recovery, followed by acceleration in traffic in the second quarter.

Various airlines are likely to record domestic traffic of 80-95 million passengers in FY22, up from 52.5 million in FY21, but well below the almost 140 million recorded in FY 2020.

CAPA has reiterated that the government needs to have a plan B in place if the privatisation process for Air India fails. It estimates an increase in liabilities of Air India to climb to $20 billion by 2025 making it unattractive to bidders.

“The equation from an investor’s perspective is a potential liability of around $20 billion before the business turns around,” CAPA says.

“The government must, therefore, keep this massive financial burden in mind and consideration should be given to making changes to the terms and conditions (of the disinvestment process),” CAPA said in the report.


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Printable version | Jul 30, 2021 11:06:40 PM | https://www.thehindu.com/business/Industry/airlines-in-india-may-post-41-bn-loss-in-fy22-capa/article34721343.ece

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