The Omicron-led third wave of the pandemic could push full recovery in air traffic into fiscal 2024 from its earlier expectation of it happening in fiscal 2023, Crisil said in a report.
“A material impact on the credit quality of airport operators, however, is unlikely as the dip in revenue is expected to be limited by a likely strong rebound and operators have adequate debt-servicing cushions, liquidity buffers and financial flexibility to absorb the blip in traffic,” it said.
“An analysis of the top four private airports ― Delhi, Mumbai, Bengaluru and Hyderabad ― which accounted for 90% of air passenger traffic handled by private airports and 50% of all passenger traffic last fiscal, indicates as much,” it added.
“The high infection rate of Omicron has resulted in several state governments and local authorities, such as Delhi and Mumbai, announcing restrictions on movement,” said Manish Gupta, senior director, Crisil Ratings.
“In fact, domestic traffic is down by 25% from the highs of December 2021 in the first week of January 2022 itself. Both personal and business travel will take a hit in January and February, leading to air traffic plunging an estimated 30% sequentially in the fourth quarter of this fiscal,” he added.