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Further consolidation likely in aviation biz

Further consolidation likely in aviation biz
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Further consolidation likely in aviation biz

Highlights

Weak liquidity position of some Indian airlines is likely to force them to curtail operations and allow stronger rivals to enhance their presence in the domestic aviation sector, Fitch Ratings said on Wednesday

Mumbai: Weak liquidity position of some Indian airlines is likely to force them to curtail operations and allow stronger rivals to enhance their presence in the domestic aviation sector, Fitch Ratings said on Wednesday.

Accordingly, the ratings agency cited that a higher market share, apart from cost-cutting measures, will allow airlines such as market leader IndiGo to improve their performance after a sharp drop in earnings in 2Q20, even though overall travel demand is unlikely to rebound quickly.

"We think IndiGo is well placed to further consolidate its market position in the coming months due to the liquidity pressure at rival airlines. Its share of domestic passengers has already risen to 60 per cent by end-July 2020 from 48 per cent in 1Q20," the agency said in a statement.

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