Wednesday, April 01, 2020

Fitch Affirms Hyderabad Airport 'BB+' Rating; Outlook Negative

Hong Kong/London: Fitch Ratings has affirmed GMR Hyderabad International Airport Limited's (GHIAL) Long-Term Issuer Default Rating (IDR) and its bond issue ratings at 'BB+' with a Negative Outlook.

The coronavirus pandemic and related government containment measures worldwide create an uncertain global environment for air travel in the near term. Fitch's ratings are forward-looking , and Fitch will monitor pandemic-related developments in the sector for severity and duration, and incorporate revised base- and rating-case qualitative and quantitative inputs based on our expectations for performance and assessment of key risks.Our Negative Outlook reflects the pandemic-related impact on the airport's passenger traffic and revenue, execution risk of the debt-funded airport expansion plan and price uncertainty for future five-year control periods.

GHIAL's most recent performance data may not have indicated outbreak-related impacts, but we expect travel restrictions to affect severely GHIAL's passenger traffic and revenue. The Indian government has imposed a 21-day nationwide lockdown until 14 April 2020. A prolonged outbreak and further deterioration in the economy will hurt business and leisure travel and passengers' spending in the airport, leading to reduced aeronautical and non-aeronautical revenue. Still, GHIAL's traffic is 80% domestic passengers, who we see as more resilient than international traffic. However, any nationwide lockdown as currently imposed would also affect domestic traffic.
01/04/20 Fitch Ratings
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