Air traffic is expected to collapse in FY2022 and not fully recover until Q4 FY2023, due to the debilitating consequences of India’s second wave of COVID-19, said Crisil in a report.
But, the credit quality of airport operators will continue to be supported by solid business models and sound liquidity hedges against a backdrop of low debt service needs during this fiscal year, he added. .
With localized closures, nighttime curfews and other restrictions on the movement of people, passenger traffic at airports has taken a nosedive, with average daily domestic passenger traffic halving in May 2021 compared to February 2021, or just 10% of pre-pandemic levels seen in May 2019, the rating agency said in the report.
“The second wave will delay the resumption of business travel and the resumption of international traffic, which accounts for more than half of global traffic,” said Manish Gupta, senior director of Crisil Ratings. “Given this backdrop, we now forecast that traffic volumes for this fiscal year will be at 60% of fiscal 2020 levels, and that the return to pre-pandemic levels will only occur by the fourth. quarter of fiscal year 2023, “he added.
He said traffic volumes are expected to rebound once the current affliction curve begins to flatten.