Mumbai: Rating agency CRISIL has downgraded the rating for Spicejet Ltd’s short term loans from "BB-" to "B" on significant deterioration of business risk profile.
It has also cut the outlook in rating from "positive" to "negative".
The rating actions on Spicejet are triggered by discontinuation of international operations till April 30, 2020 and suspension of domestic flights till March 31, 2020 trigged by Covid-19 outbreak.
If the closure is prolonged it may have further impact the credit profile of airline operators, including SpiceJet, CRISIL said in a statement.
Against the backdrop of a modest revenue expectation, the company will have to continue to incur fixed costs such as lease rentals and workforce costs. This will result in operating losses and a weakening of the financial risk profile. Cancellations of existing travel plans because of the Covid-19 scare will further put pressure on liquidity.
The outlook revision reflects the expectation of further deterioration in SpiceJet's business risk profile amid the Covid-19 pandemic.
29/03/20 Abhijit Lele/Business Standard
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It has also cut the outlook in rating from "positive" to "negative".
The rating actions on Spicejet are triggered by discontinuation of international operations till April 30, 2020 and suspension of domestic flights till March 31, 2020 trigged by Covid-19 outbreak.
If the closure is prolonged it may have further impact the credit profile of airline operators, including SpiceJet, CRISIL said in a statement.
Against the backdrop of a modest revenue expectation, the company will have to continue to incur fixed costs such as lease rentals and workforce costs. This will result in operating losses and a weakening of the financial risk profile. Cancellations of existing travel plans because of the Covid-19 scare will further put pressure on liquidity.
The outlook revision reflects the expectation of further deterioration in SpiceJet's business risk profile amid the Covid-19 pandemic.
29/03/20 Abhijit Lele/Business Standard
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