The aviation industry will be one of the most adversely affected sectors of the economy this year, with a revenue loss of ₹24,000–25,000 crore this fiscal, CRISIL said.
It said the huge revenue loss would spur structural changes in the industry, with mergers and acquisitions taking place.
Even though the roads and highways sector would be impacted to a large extent, its rebound will be faster, the ratings agency said in a report.
Jagannarayan Padmanabhan, Director and Practice Leader, Transport & Logistics, CRISIL Infrastructure Advisory, said the airlines would be the worst-affected, contributing more than 70% of the losses, or ₹17,000 crore, followed by airport operators with ₹5,000-5,500 crore, and airport retailers (including retail, food and beverages and duty-free) with ₹1,700-1,800 crore. “This would reverse the trend growth of 11% per annum the industry has logged over the past 10 years, making it one of the most adversely affected sectors of the economy,” he added. The losses will climb if travel restrictions last longer in hubs such as Mumbai, Delhi, Chennai and Kolkata, he said.
“We expect the aviation sector to take at least 6-8 quarters to reach pre-pandemic levels. These are preliminary estimates, and aggregate losses could increase if the lockdown is extended beyond the first quarter,” he added.
“As and when operations resume, overall operational capacity will hover at 50-60% for the rest of the fiscal,” he said.
As far as the roads and highways sector is concerned, it will see developers/ toll operators incurring toll revenue losses of ₹3,450-3,700 crore during March-June, the report said.
The National Highways Authority of India (NHAI) will lose ₹2,100-2,200 crore in toll over this period, it said.
In addition to the loss in toll revenue, stakeholders will 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, the report added.
Moreover, the NHAI had planned to raise ₹80,000-85,000 crore through fiscal 2025 by monetising 6,000 km of operational public-funded toll roads. This asset monetisation programme through toll-operate-transfer and infrastructure investment trusts will likely take a hit, CRISIL said.
Akshay Purkayastha, Director, Transport & Logistics, CRISIL Infrastructure Advisory said, “Tolling operations resumed on April 20 and construction on select projects has also restarted. Going forward, the ramp-up in traffic, availability of labour and raw materials for construction, and expeditious dispute resolution will be the key monitorables.”
“In addition, road authorities such as the NHAI will have to step up initiatives beyond conventional avenues such as development of way-side amenities and formation of special purpose vehicles/ joint ventures for both, financing and revenues,” he added.