ICRA has reaffirmed the
Interglobe Aviation's (Indigo) short-term rating at [ICRA] Al. The Long-term rating of the Company has been downgraded by one level from [ICRA] A+ to [ICRA] A, while the outlook remains negative.
In its regulatory filing, Indigo said that ICRA has acknowledged the Company's strong market position, cost competitiveness and healthy liquidity profile amongst its peers but attributed the downgrade to prolonged disruption caused by the Covid-19 pandemic on the Company's financials.
ICRA expects the Indian airline industry to remain adversely impacted in the near term and recovery in passenger traffic and yields to be gradual. In line with the industry, the profitability of the Company is also vulnerable to volatility In fuel prices and foreign exchange.
Further, Indigo said that even though the aviation industry Is going through an unprecedented crisis, the Company's balance sheet remains strong. The Company ended Ql FY 2022 with a total cash balance of As. 17,068 crore, including a free cash balance of As. 5,621 crore. The Company continues to make all its payments including lease-related payments and service its debt on time. Regardless of all the challenges, the Company's focus throughout the pandemic has been to manage its cash levels, improve its cost structure, run a high quality airline with highly engaged employees and position itself for the future.
At around 2.13 pm, Indigo was trading at Rs1697.40 per piece down 0.4% on Sensex.