Travel restrictions

Relaxation of travel restrictions to increase profits for the airport infrastructure sector: ICRA

Streamlining travel restrictions after the lockdown is expected to boost operating profits for the airport infrastructure industry in FY22, the ICRA said on Wednesday.

However, the outlook for the sector remains “negative”, the rating agency said.

“The operating income and operating profit of the sector are estimated at Rs 14,000 crore and Rs 3,250 crore (operating loss of Rs 1,450 crore in FY 21), respectively, in FY 22, “said Rajeshwar Burla, Group Head, Corporate Ratings, ICRA.

“Domestic traffic has experienced healthy MoM (month-to-month) growth since June 2021, with traffic reaching 72% of pre-Covid levels in October 2021, the highest since the start of the pandemic. Passenger traffic is expected to rise. reach 82-84% year-on-year (year-on-year) in FY22, “the rating agency said.

“The significant increase in vaccination, the decline in Covid cases and the resumption of revenge leisure travel are supporting the growth of domestic passenger traffic,” he added.

In addition, the recent announcement by the Ministry of Civil Aviation to increase the number of seats to 100% with effect from October 18 has also supported the sector.

In addition, ICRA notes that ongoing capacity expansion plans at some major airports are expected to be delayed by 12 to 18 months due to the pandemic.

“The cost of completion is expected to increase due to the increase in interest during construction, as some of the airports financed the investments with bonds in fine which were taken immediately,” he added.


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