With air travel grinding to a halt, listed Indian carriers could be staring at billion-dollar losses over a period of two quarters. According to aviation consultancy firm CAPA India, “In the event of a three-month shutdown, the two listed carriers alone—IndiGo and SpiceJet—could report a combined loss of $1.25 billion to $1.50 billion across Q4FY20 and Q1FY21.”

From March 25 onwards, the Indian government suspended all domestic flight operations indefinitely to contain the spread of Coronavirus in the country. While all international flight operations were suspended for one week beginning March 22, the ban could be much longer, as India is currently under lockdown for 21 days. Overall, CAPA India estimates that India’s aviation sector could incur losses to the tune of $3.3 billion to $3.6 billion in the first quarter (April-June) of FY21.

Traditionally, the April-June quarter is a strong one for Indian airlines, which now looks to be a complete washout. Even IndiGo’s enviable free cash reserves of over $1 billion may almost be “wiped out”, while smaller carriers “may exit” from the market, says CAPA India. Further, the consultancy firm believes that India’s tea-to-steel conglomerate Tata Sons “may be strategically compelled” to operate just one, rather than two airlines—AirAsia India and Vistara.

CAPA India says the Covid-19 impact on air travel could possibly lead to a structural reset of the aviation sector in India, with a strategic shift in terms of traffic growth, fleet expansion, pricing, costs, and business models. “Although it is too early to come to a firm conclusion, what emerges on the other side may be a smaller, consolidated industry.”

A reset of the aviation sector could also possibly delay the privatisation of Air India, which was currently underway. “The government must prepare a backup plan, which will require it to make a renewed commitment to operating the national carrier, and to brace the exchequer for long-term capital infusions,” says CAPA India. In the short-term alone, it adds, “Air India could conservatively require financial assistance of over $1.5 billion to survive.”

Follow us on Facebook, Twitter, YouTube & Instagram to never miss an update from Fortune India. To buy a copy, visit Amazon.