BackFlight bookings rise on covid jab hopes
Airline bookings have picked up from the last few months with daily domestic passenger count touching about 200,000Airlines are currently allowed to operate only upto 60% of its pre-covid capacity
PremiumNEW DELHI : Airline stocks and flight bookings continue to surge day after the announcement of successful clinical trials for a covid-19 vaccine developed by Pfizer and BioNTech, amidst a festive season that could revive business for carriers.
Airline bookings have picked up from the last few months with daily domestic passenger count touching about 200,000. While the numbers still remain way below the pre-covid figures industry experts maintained that clarity emerging on the vaccine front the sector which is among the worst affected by the pandemic could see steep recovery in the coming days and months.
On Tuesday stocks of large listed airlines like IndiGo, and SpiceJet Limited, gained 9.13% and 2.7% respectively on the BSE on Tuesday, days after InterGlobe Aviation Ltd-operated IndiGo, India’s largest domestic airline, reported a third straight quarterly loss at ₹1,195 crore during the September quarter due to the ongoing covid-19 pandemic. SpiceJet Limited, which has been facing financial distress for the past several quarters is expected to report its September quarter results on 11 November.
Online travel company EaseMyTrip, which reached 75% of its pre-covid19 bookings last week largely due to festive season bookings, has seen advance ticket bookings pick up since the announcement of the latest successful candidate for covid-19 vaccine couple of days ago, said Nishant Pitti, chief executive and co-founder of the company.
"We are seeing an increase in the business on a month to month basis," Pitti added.
A senior official at a no-frill carrier said that the news of the eminent arrival of a credible vaccine will go a long way to build consumer confidence to travel.
"Overall bookings have picked up since last month due to the festive season with most passengers booking closer to their travel date. We are confident that the booking numbers will only improve from the current level," the official said requesting anonymity.
"Revival of the airline sector will however also depend on key government decisions like scappring off fare caps and overall capacity restrictions in the market," the official added.
Airlines are currently allowed to operate only upto 60% of its pre-covid capacity. The government plans to extend this to 75% in the coming months.
“We have been observing a steady rise in demand since the resumption of domestic operations and the consistent rebuilding of passenger confidence further makes us optimistic about the future. Demand for air travel among larger corporates remain low as majority of the work force continue to work from home," a Vistara spokesperson said.
Spokespersons of major commercial airlines like IndiGo, SpiceJet, GoAir, AirAsia India and Air India didn't offer comments.
However, corporate and business bookings, a key revenue source for airlines, remain subdued as business travel remains minimal during the pandemic.
IndiGo's chief strategy and revenue officer Sanjay Kumar had at the company's post results call to analysts last week said that business and corporate bookings could take a few more months to pick up.
"So the pre-covid level, the corporate business and the business traveler, if I may put it, used to be about 50% of all overall traffic....
While it is (now) nowhere in comparison to the pre-COVID level, but we hope in the next few months, I think things will start to change there as well," Kumar added.
The business and corporate travel is yet to pick up as the fear of covid-19 pandemic has not been allayed yet and many corporates as a result are continuing to work from home, said Kinjal Shah, vice president at ICRA.
"It (bookings) will also depend on the overall recovery in economic growth and improvement in consumer sentiments," Shah added.
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