Credit ratings agency ICRA predicted the status of Indian Aviation Industry and said that healthy passenger load factors, along with a decline in competitive intensity is expected to aid the Indian aviation industry to reduce its losses in FY2018.
As per a research note by ICRA, healthy passenger load factors supported by a decline in competitive intensity due to moderation in capacity addition and suspension of operations of three regional airlines has augured well for the industry profitability.
“This coupled with a gradual improvement in the core growth drivers like economic environment, tourism demand and regulatory support and a strong demand during the peak season is expected to support the industry profitability during H2 FY2018,” the research note said.
According to Kinjal Shah, Assistant Vice President & Co-Head, Corporate Sector Ratings, ICRA, the aggregate net loss of the industry (which does not includes Vistara and AirAsia India) is expected to reduce to “Rs 50 million to Rs 1 billion in FY2018 from Rs 10 billion in the previous year”.
“It has to be noted that the loss is primarily on account of losses of Air India, while all other major airlines are expected to report profits during the year,” he said.