The exorbitant price of jet-fuel, the extreme price-sensitive behaviour of the market, currency risk, cash-flow risk, the taxation policy and the lack of a united front—for India’s airlines that ride has been anything but smooth. Even so, until the beginning of this year, India’s aviation sector was on an ascent. Passenger volume growth of 3.2X for domestic traffic and 2.1X for international traffic over the last decade and forecast growth of double digits through 2028 was the accepted narrative. Voluminous aircraft orders that touched 1200 aircraft at peak, mixed in with misunderstood load factor figures and a cash-accretive financing mechanism, helped gloss over cash-flow challenges. On a foundation of double-digit growth, airlines leveraged the future to raise liquidity and enhance borrowing. Yet with the Corona pandemic coupled with the now exposed fault-lines, it has all come crashing down. Liquidity is thin, leverage is high. Listlessness is common.
Between cash-flow, credit and commitment, the situation is untenable. Read how >>
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Between cash-flow, credit and commitment, the situation is untenable. Read how >>
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