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ICRA downgrades InterGlobe Aviation’s long-term rating 

ICRA downgrades InterGlobe Aviation’s long-term rating 

The rating agency expects the Indian airline industry to remain adversely impacted in the near term with gradual passenger traffic recovery and yields

Indigo's short-term rating affirmed at A1 Indigo's short-term rating affirmed at A1

InterGlobe Aviation’s (IndiGo) long-term rating has been downgraded by ICRA by a level to A from A+ as the outlook remains negative. This downgrade comes after the airline reported its highest-ever quarterly loss in April-June period. The short-term rating has been reaffirmed at A1, said the company in a regulatory filing.

The filing, however stated that ICRA acknowledged the company’s strong market position, cost competitiveness and healthy liquidity profile among its peers. It additionally attributed the downgrade to the prolonged disruption caused by the pandemic.

The rating agency expects the Indian airline industry to remain adversely impacted in the near term with gradual passenger traffic recovery and yields. Due to the adverse impact on the industry, InterGlobe’s profitability has also become vulnerable to volatility in fuel prices and foreign exchange.

InterGlobe said in the filing that despite the crisis in the aviation industry, the company’s balance sheet remains strong. As on the end of FY22 Q1, the company had a cash balance of Rs 17,068 crore, including a free cash balance of Rs 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,” it said.

InterGlobe Aviation’s losses widened to Rs 3,174 crore for the three months to June against Rs 2,844 crore loss in the year-ago period. The company reported its sixth consecutive loss in the last quarter. Losses widened due to a sharp fall in revenues amid the second wave of the coronavirus pandemic.
                    
Headquartered in Gurugram, InterGlobe has a workforce of over 24,000 people spread across over 27 countries and over 100 cities globally.

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