InvestorQ : What could be the quantum of losses that airline stocks like Indigo Spice Jet would have to incur as a result of the COVID-19 lockdown?
Rutuja Nigam made post

What could be the quantum of losses that airline stocks like Indigo Spice Jet would have to incur as a result of the COVID-19 lockdown?

Answer
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Arti Chavan answered.
4 months ago


Mar-20 quarter of financial year 2019-20 could be first among the many loss-making quarters for the aviation sector. IndiGo and SpiceJet had drastically cut operations by mid-March, and had begun grounding fleet as net bookings fell into negative. It came to a complete halt on March 25 after the ban on domestic air travel as well as on international flights. IndiGo and SpiceJet could report a cumulative combined net loss of Rs.3350 crore the fourth quarter. This will be despite crude oil prices being at record lows. However, Indigo is expected to end the fiscal year with a 48% market share. Airlines are in a business where each day the aircraft idles is a major loss for the airline in terms of lost revenues. Also fixed costs like lease rentals and salaries as well as maintenance costs continue.