The Centre for Asia Pacific Aviation, a global aviation market intelligence firm, has said that Indian airlines might require nearly $2.5 billion to to stay afloat during the financial crisis, as its pre-existing woes have been exacerbated by the pandemic. The sum may only last until the end of this year.
Although the airlines approached the federal government requesting a relief package to cushion the blow delivered by the lockdown, the government has yet to provide any relief. This is in contrast to relief measures which have been introduced in the countries of Europe and in the US; globally, airlines have been provided $123 billion in emergency assistance.
National and international flights were halted in India on 25 March and domestic flights only resumed after two months. Despite an initial surge in passenger traffic, induced by stranded passengers, the passenger traffic has ebbed considerably. High fuel costs and taxes have further increased the operating costs of the airlines.
Way Forward
Ankur Bhatia, aviation expert and the Executive Director of Bird group, told Sputnik that the aviation industry might not recover without stimulus, but the carriers, too, will have to optimise their capacity.
"The airlines, by themselves, need to optimise costs and fleet sizes at this point because the demand might only come back after six months or a year. Airlines will also have to take care of their fixed costs," Bhatia said.
With the International Air Transport Association stating that nearly 3 million jobs might be lost along with $11 billion in revenue this year, several airlines in India have already cut staff and salaries.
When asked if any of the Indian airlines are headed for the same fate as Jet Airways and Kingfisher, the Bird group executive director said that growth was unprecedented in India despite the closure of these two airlines, that passenger traffic has only grown, and that airlines have discounted their fares to gain market share.
Emphasising that there is a need for airlines to rethink their policies, lest we face more of these situations, Bhatia said, "When you see airlines increasing their capacity by getting other sources of income, it is good step because in a growing as market it can be sustained. But in a market which is not growing or even getting stagnant, such policies might not work."
Meanwhile, India's Civil Aviation Minister Hardeep Puri has also said that 300 Air India flights would be added to the operational flights.
