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“2020 will be the worst year in history for airlines" International Air Transport Association (IATA) As per CRISIL, the aviation industry is expected to have revenue loss of Rs 24,000–25,000 crores (more than $3 billion USD) in FY2020-21 and it will take the industry at least 6-8 quarters to come back to 2019 traffic levels. On the other hand, ICRA says that domestic passenger traffic to witness degrowth of ~41-46% in FY 2020-21, with the domestic passenger traffic reaching much lower than FY2015-16 levels. While India resumed the domestic air travel in a phased manner, international passenger travel is still banned at least till 30th June 2020. Even after the resumption, the social distancing norms will put significant pressure on the airline companies in the form of lower load factors and higher operating costs. Lower traffic, lower load factors and higher operating costs are expected to result in severe economic pressure in this sector. We can expect increased NPA, a few defaults and increased consolidation in this sector in the coming years. This is one of the hardest affected sectors by the pandemic. Let us talk about the aviation industry in India.
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