New Delhi: Inter Globe Aviation ltd, the holding company of low cost air carrier Indigo on Wednesday admitted that the worldwide outbreak of Coronavirus ( COVID19) coupled with Rupee depreciation are likely to impact its quarterly earnings.
In a statement, the company said that it has witnessed 15-20% decline in daily bookings in the past few days and the number could change from here based on the situation. In January and February the impact was modest as the spread of the virus was limited to China and Hong Kong only. However, as the outbreak spreads all over the world, the impact on the business is increasing.
“In January and February 2020, IndiGo experienced modest impact from the Coronavirus. We cancelled our flights to China and Hong Kong and reduced frequency to certain other Southeast Asia markets. This capacity was redeployed in other markets without having a material impact on our revenues. Over the past few days however, week-on-week, we have seen a 15-20% decline in our daily bookings. Please note that the numbers could change from here based on how the situation evolves” said the company.
“We expect our quarterly earnings to be materially impacted because of the above. In addition, the rupee has also depreciated sharply which will have an adverse impact on our dollar denominated liabilities primarily on account of capitalized operating leases” it added.
The global aviation industry is in a tailspin due to the worldwide spread of COVID19. According to an estimate by IATA (International Air Transport Association) the industry may lose revenue to the tune of $ 100 billion in 2020. Airlines stocks have already declined by 40% since the outbreak.
The COVID-19 outbreak has killed about 4105 people worldwide with maximum deaths have been reported from China. However, while the rate of growth of positive patients have decreasing in China, it is growing in other countries countries like Italy, US and Iran.