InvestorQ : Can we expect a recovery in aviation stocks going ahead and what is the outlook?
Mahima Roy made post

Can we expect a recovery in aviation stocks going ahead and what is the outlook?

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2 months ago
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They still have a tough road ahead. In fact, a recent report by ICRA has pointed out that the aviation industry will need capital support of around Rs.45,000 crore over the next 2 years to reduce their debt burden and also in order to protect their balance sheets. That is because, most of the aviation companies had to put up with a lot of cash burn due to steep fuel prices. ICRA continues to be negative on the aviation industry.

The overall aviation industry is expected to report a very steep loss in FY22 and it may take a long time for them get back demand at peak levels and recoup the losses in this interim period. There has not been much government support for aviation in India, unlike many other countries. In addition, if you look at ATF prices, they spiked by 71% yoy in the first 5 months of FY22. The government imposed fare caps have only made things worse.

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