Domestic airlines require strong promoters

The domestic airlines require a strong, supportive promoter to improve their viability amid a challenging operating environment, says a report. 

Besides, a majority of domestic airlines are unlikely to enjoy investment grade ratings on a standalone profile, given the challenges in cost structure, competitive intensity and muted growth expectations in the medium term, said India Ratings and Research ( Ind-Ra) in its special report on airline industry released here today. 

According to the report, the domestic airlines are prone to becoming distressed assets due to their cost structure related inefficiencies, driven by taxation and regulatory issues, high financial leverage and chronic cash flow generation issues. 

Full report here Economic Times 


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