Domestic airlines industry is expected to fly back into profitability next fiscal, for the first time since the outbreak of Covid, amid easing cost pressures and reduction in leverage to support credit profiles, a report said on Wednesday.
As per the report by credit rating agency Crisil, the industry is also likely to pare its net loss by as much as 75-80 per cent year-on-year to `3,500-4,500 crore this fiscal, compared with around `17,500 crore last fiscal.
Strong recovery in passenger traffic and easing cost pressures are supporting this turnaround in operating performance of airlines, Crisil said.
The projections are based on Crisil Ratings analysis of three airlines that account for around 75 per cent of domestic air traffic.
Domestic and international passenger traffic recovered to 90 per cent and 98 per cent, respectively, in the nine months through December this fiscal, compared with the corresponding period of fiscal 2020 (pre-pandemic).
Business and leisure travel rebounded strongly even as international scheduled services resumed, it said and added that the festival season has accelerated recovery in the second half.