Tuesday, October 23, 2018

IndiGo, SpiceJet, Jet Airways face credit rating revisions as costs spiral

New Delhi: Listed carriers -- IndiGo, SpiceJet and Jet Airways -- have seen this month downgrading of credit rating assigned to some of their loan facilities as they grapple with rising expenses and limited room to hike fares amid intense competition.

Despite being one of the fastest growing domestic aviation markets in the world, local carriers have been facing tough business conditions, especially with surging oil prices and depreciation of the rupee.
As players look to woo more passengers with cheap fares, airlines have not been fully able to increase ticket prices.
Against this backdrop, rating agencies Icra and Crisil have downgraded various loan facilities of the three airlines.

On October 17, Icra cut the long-term rating on outstanding Rs 8,000 crore worth bank facilities of InterGlobe Aviation Ltd even as it re-affirmed the short-term rating.

"The rating action takes into consideration expected adverse impact of the significant increase in operating costs of airlines, including IndiGo, and their limited flexibility to effect price hikes to offset cost pressures."
23/10/18 PTI/New Indian Express
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