InvestorQ : How do you see the recent downgrade of Spice Jet by CRISIL impacting the airline companies in India?
Archita Jajjoo made post

How do you see the recent downgrade of Spice Jet by CRISIL impacting the airline companies in India?

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Rashi Mehra answered.
7 months ago
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CRISIL has downgraded Spice Jet from “(BB-)“ to “B” as the operating environment gets tough for airline companies in India. The outlook for the stock has been also cut from positive to negative indicating that further downgrades are possible. The reason for the downgrade is the deteriorating risk profile of the airline, suspension of domestic routes post COVID-19 outbreak, closure of international borders and lower PLF for airlines. This is expected to substantially impact the profitability of airline companies. Despite the weak revenues due to the closedown, Spice Jet also has challenges in terms of market competition and the overload of fixed costs like lease rentals on its numbers. Apart from Spice Jet, even Indigo is vulnerable to a downgrade despite its relatively dominant market share in the Indian market.

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