Tuesday, May 11, 2021

India’s airlines under renewed pressure to raise cash or downsizing risks

New Delhi: India’s airlines are under renewed pressure to raise cash or face the risk of having to downsize, consolidate or have their planes repossessed by lessors as a surge of Covid-19 infections roil  travel.

Passenger traffic fell nearly 30 per cent in April from a month before and has halved again so far in May, forcing even the country’s biggest and most cashed-up carrier, IndiGo, to act.

IndiGo’s parent, Interglobe Aviation, on Monday said its board has approved raising up to Rs 3,000 crore through the sale of shares to institutional investors. 

With traffic plummeting, IndiGo’s cash burn is expected to rise to $3.4 million a day — a level last seen in September — from $2 million a day at the end of 2020, an analyst said.

While IndiGo is seen as a survivor, the situation is worse for smaller carriers, particularly those without large backers, some of which were struggling before the novel coronavirus hit, analysts say.

“India hasn’t provided much government assistance or support so the private airlines will need to turn to the private sector,” aviation analyst Brendan Sobie said.

11/05/21 Reuters/Telegraph

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