The Negative Outlook reflects the ongoinguncertainty relating to the timing and duration of the trafficshock and recovery caused by the coronavirus pandemic, therating agency said on Tuesday.
GMR Hyderabad International Airport Limited(GHIAL) and Delhi International Airport Limiteds (DIAL)operations are limited to cargo and evacuation flights underthese circumstances.
A prolonged pandemic and nationwide lockdown, andfurther deterioration in the economy, will reduce airpassenger traffic and lead to lower aeronautical and non-aeronautical revenue than Fitch expects, it said.
"We currently assume a recovery from the trafficand revenue shock in the financial year ending March 2022(FY22) as DIAL operates a strategic airport serving thecountry's national capital region and benefits from a highshare of domestic traffic, with greater resilience.
However, we will revise our rating case accordinglyif the severity and duration of the outbreak are worse thanour current expectations," Fitch said in case of DelhiAirport.
DIAL has implemented various measures to reduceits operating expense including consolidation of terminaloperations, reduction of utility costs, and rationalisation ofmanpower and consultants.
Management indicates operational costs could becontained at a minimum of about Rs 900 crore for FY20-FY21.
DIAL has also deferred some of its capex originallybudgeted for FY21 In light of the reduced cash flow in thenear term.
DIAL had total cash and a bank balance of about Rs4,000 crore in early May 2020.
Fitch believes the company has sufficient liquidityto meet its operating expense and debt payments.
DIAL has no major debt maturities until 2022, therating agency said.
GHIAL had total cash and a bank balance of about Rs2200 crore in late April 2020.
The company could also draw down a banking limit forthe expansion plan Fitch said adding it believes the companyhas sufficient liquidity to meet its operating expenses anddebt payments. GDK SS