Few domestic airlines under threat of existence: ICRA
Rating agency ICRA has said in a report that Indian carriers are expected to incur combined losses of Rs 5,100-6,100 crore in the period between March 25 and May 31. It added further that a few domestic airlines, that were already reeling under financial stress, are staring at an existential crisis in the wake of the coronavirus pandemic.
In the light of this scenario, several airlines have already started resorting to cost-cutting measures such as undertaking salary cuts for their employees, including leave without pay and laying off pilots and crew members to cut costs. For example, GoAir has sent its staff on leave without pay till May 31 while AirAsia India & Vistara reduced their employees’ salaries.
“While some airlines have sufficient liquidity and/ or financial support from a strong parentage, which will help them sustain over the near term, some airlines, which were already in financial stress, are facing (an) existential crisis,” the report stated. However, there were some airlines SpiceJet, IndiGo and Vistara like that are earning revenues and even profiting from operating cargo flights on a commercial basis.