InvestorQ : How badly is the airline industry globally going to be impacted by the Coronavirus? How will it impact stocks like Indigo and Spice Jet?
swati Bakhda made post

How badly is the airline industry globally going to be impacted by the Coronavirus? How will it impact stocks like Indigo and Spice Jet?

Answer
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Dia Deshpande answered.
3 months ago


It is estimated by IATA that the Coronavirus could eventually in the global airline industry losing close to $84 billion in 2020; in one of the worst years for aviation. In the year 2021, IATA estimates that airline traffic could rise by 55% but would still be nearly 30% below the 2019 levels. Net profits of airline companies could take a hit of $16 billion during the year 2020 due to the central government being kept in the loop properly. Movement is still not free; for example, Britain is insisting on a 14-day mandatory quarantine for all arrivals in the UK. That could cause a lot of displeasure.

Both Indigo and Spicejet have an unfavorable ratio of CASK to RASK and that will keep the profits under pressure. Spicejet may be a lot more vulnerable as it also has a problem of liquidity. Ideally, this is time to stay away from airline companies.