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Moody's investor places Hyderabad airport's rating on review for possible downgrade

ANI
Published : Mar 26, 2020, 6:27 pm IST
Updated : Mar 26, 2020, 6:27 pm IST

Rating action reflects worsening coronavirus outbreak and the increasingly stringent travel restrictions imposed both in India and globally

 Rajiv Gandhi International Airport. (Photo- PTI)
  Rajiv Gandhi International Airport. (Photo- PTI)

Singapore: Moody's Investors Service has placed GMR Hyderabad International Airport Ltd's (HIAL's) Ba1 corporate family rating on review for possible downgrade.

The outlook has been changed to a rating under review from negative. The rating action reflects the worsening coronavirus outbreak and the increasingly stringent travel restrictions imposed both in India and globally, including ongoing measures introduced by the government.

HIAL is the concessionaire for the Rajiv Gandhi Hyderabad International Airport (RGIA) in Hyderabad under a long term concession agreement with the Ministry of Civil Aviation.

"The rating action reflects our expectation of a sharp decline in passenger and aircraft traffic at Hyderabad Airport in the coming months and the uncertainty over the timing and extent of a recovery, which coincides with increased debt issuance as the airport enters the peak stage of its Rs 5,500 crore expansion project," said Moody's Vice President and Senior Analyst Spencer Ng.

The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets.

The combined credit effects of these developments are unprecedented, said Moody's.

The airport sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment.

While the current environment is unpredictable, Moody's expects a recovery in airport traffic to commence in the second half of the year.

Nevertheless, Moody's expects that the airport's traffic levels for the next two to three years will be lower as a result of the coronavirus.

Tags: hyderabad airport, rajiv gandhi international airport, coronavirus outbreak, coronavirus (covid-19)