Indian airlines likely to prune losses to ₹3,000-5,000 crore this fiscal: ICRA

Indian airline industry is expecting to prune its net losses to ₹3,000-₹5,000 crore in this fiscal from an estimated ₹17,000-₹17,500 crore in FY2023

Indian airline industry is expecting to prune its net losses to ₹3,000-₹5,000 crore in this fiscal from an estimated ₹17,000-₹17,500 crore in FY2023 on the back of improved yields and stable cost environment, credit ratings agency ICRA said on Tuesday.

At the same time, ICRA also estimated that domestic air passenger traffic will expand by 8-13% each in FY2024 and FY2025.

The rating agency has also maintained its stable outlook on the industry in view of healthy passenger traffic growth, improved yields and a stable cost environment.

Building on the fast-paced recovery in FY2023, ICRA at a webinar on Tuesday said it is expecting the domestic air passenger traffic to grow by 8-13% in the ongoing financial year, thereby reaching 150-155 million and surpassing the pre-Covid levels of 141.2 million seen in FY2020.

The Industry's net loss (is expected) to shrink to ₹30-50 billion in FY2024 from an estimated ₹170-175 billion in FY2023, aided by improved yields and stable cost environment, ICRA said.

"The air passenger traffic momentum witnessed in the current fiscal is expected to continue in FY2025, though further expansion in yields from the current levels may be limited. Thus, the industry is estimated to report a similar net loss of ~Rs. 30-50 billion in FY2025 as well," said Suprio Banerjee, Vice President & Sector Head, Corporate Ratings, ICRA Limited.

The momentum in air passenger traffic growth is expected to continue in FY2025 as well with a similar estimated year-on-year growth, aided by rising demand for air travel and improving airport infrastructure, ICRA said.