Covid-19 impact: Air India Express' short-term loans get ICRA downgrade

ICRA has downgraded the rating for Air India Express’ (AIEL’s) short-term loans to A4 from A4+, given the adverse impact of Covid on air travel. The revision also reflects the likelihood of its extended impact, according to the rating agency.
 

The rating also takes into account AIEL’s stretched credit profile, characterised by negative net worth and a high outstanding to Air India and other vendors.
 

It had opted for the moratorium until August 2020. AIEL has a fleet of 24 B737-800 aircraft.
 

AIEL reported a net profit of Rs 455.5 crore in FY20 (as per provisional financials), against Rs 164.4 crore in FY19.
 

However, it recorded a net loss of Rs 234.4 crore in Q1 FY21. This resulted in an increase in total debt (excluding lease liabilities) to Rs 1,788 crore as of June 30 from Rs 1,555 crore as of March 31. Further, payables to AI rose to Rs 1,011 crore as of June 30 from Rs 998 crore as of March 31.
 

The rating considers the continued operational synergies and joint procurement of fuel and other services with AI, ICRA added.