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Lockdown extension in metros could cripple flight operations

Indian airlines say they’re looking at huge losses if they’re not allowed to operate between tier I cities
  • Flights between green zones, mostly comprising of smaller towns, have low passenger traffic
  • Indian airlines face a debilitating cash crunch due to grounding of flight operations following the government’s decision to initiate a lockdown to contain the covid-19 pandemic. (Photo: Samir Jana/HT)Premium
    Indian airlines face a debilitating cash crunch due to grounding of flight operations following the government’s decision to initiate a lockdown to contain the covid-19 pandemic. (Photo: Samir Jana/HT)

    Indian airlines are pushing for an early resumption of domestic flights from key metros, and have warned that a prolonged lockdown could cripple their operations forever.

    Even though the government has indicated that it was in favour of restarting flights between covid-19-designated green zones, most such areas comprise smaller towns and cities, which have low passenger traffic. Most districts in New Delhi, Mumbai, Kolkata, Hyderabad and Bengaluru are in the red zone, with a large number of active covid-19 cases.

    “If airlines are only allowed to operate between smaller towns, and not major tier I cities, huge losses could be expected," said a senior executive with a no-frills carrier, requesting anonymity. “Indian airlines today operate a fleet of narrow-body planes, such as Airbus A320 and Boeing 737, which are too large to operate between smaller towns from the demand perspective. Also, it’s difficult to base aircraft and crew, and maintain fleet at smaller stations."

    IndiGo and SpiceJet have smaller planes, ATR 72-600 and Bombardier Q400, respectively. But, these comprise only a small part of their respective fleet.

    Airline officials said operating between cities in green zones will result in more losses compared to keeping their fleet grounded. “When airlines were filling 75% to 80% of capacity, their businesses were not at the best of their health. At this point of time, we don’t know what the profile of our demand is going to be. Will we be able to fill 60% or 80% of our seats? These are some of the things which at this point are quite not so clear," said an executive with a full service carrier, also requesting anonymity.

    “It may not be viable for airlines to fly on a lot of routes, especially ones connecting smaller towns and cities, due to weak demand. Also, restrictions imposed on flight operations will delay the normal resumption of airline operations, which will start in a calibrated manner, to full capacity," he added.

    Indian airlines face a debilitating cash crunch due to grounding of flight operations following the government’s decision to initiate a lockdown to contain the covid-19 pandemic, which has claimed over 279,565 lives globally. The lockdown has now been extended till 17 May.

    India’s aviation sector, including airlines, airport firms, ground handling companies and airport retailers, is expected to post losses of $3-3.6 billion in the June quarter, according to aviation consultant CAPA India.

    Kapil Kaul, chief executive officer, CAPA India, said the current situation posed a dilemma. “There are more challenges in metros with infections increasing rapidly and the peak is expected in June and July. This will constrain resumption within metros. Don’t see traffic levels in tier II cities to be anywhere close to pre-covid, and will remain very soft since traffic from tier II cities is more to metros and metros are riskier. This increases initial challenges which will remain till end of Q4."

    Kaul said collapse of airlines is inevitable unless promoters infuse sufficient funding and the government offers tax reliefs and moratoriums on debt.

    A third airline official with a no frills carrier, who spoke on condition of anonymity, said that load factors are likely to be low initially and, therefore, the Indian government, like its global counterparts, should come out with a relief package for the aviation sector.

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    Published: 11 May 2020, 12:23 AM IST
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