Home / Companies / News /  Second wave casts a cloud over fragile aviation sector

India’s second wave of covid-19 has cast a cloud over its airlines, which were barely recovering from the harsh lockdown of 2020.

Domestic passenger traffic has been rising every month since airlines returned to the skies in June. However, in the week ended 3 April, fewer Indians flew than the week before, the second straight weekly fall in passenger numbers. According to a report by ICICI Securities, an average of 239,000 people took domestic flights every day during the week, less than the 251,000 people who travelled in the previous week.

“The number of fliers per departure declined to 104 (week ended 3 April) from 109 (week ended 27 March) in the respective weeks," the report said, adding that rising covid-19 cases is an overhang on air traffic.

According to data collated by independent aviation analyst Ameya Joshi, founder of aviation website NetworkThoughts, the total number of domestic air passengers during the first seven days of April stood at 17,16,834.

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This is the first time in the last three months that passenger traffic declined. In comparison, domestic passenger traffic in the first week of March stood at 18,14,867. Domestic passenger traffic in the first seven days of January and February stood at 16,22,249 and 17,41,013, respectively, as per data.

“Airlines are headed for a double whammy, as apart from the rising number of cases, the rupee has been sliding against the US dollar, thus increasing the cost of operations for airlines," Joshi said.

The rupee closed at 74.75 against the dollar on Friday, up 2.06% from a year ago, according to Bloomberg data. A large part of airline expenses are in dollars; so any fluctuation in currency rates impacts airline operations directly.

“The so-called second wave has resulted in a lower number of bookings. This could lead to a delay in recovery of business and leisure travel," an official from a Gurugram-based low-fare airline said. “We, however, hope that this pandemic will be contained in the coming weeks with the government imposing restrictions and curfews, and with a pick-up in the ongoing vaccine drive," the official added, seeking anonymity.

Spokespersons of IndiGo, SpiceJet, Air India, GoAir, and AirAsia India did not respond to requests for comment till press time.

“Due to a surge in the number of covid-19 cases and the implementation of several measures by various states, we are witnessing a decline in demand and passenger traffic," said a Vistara spokesperson. “We are closely monitoring the situation and remain nimble in adjusting capacity, if required. We are hopeful that the situation will improve soon, leading to a return in demand," the spokesperson added.

In a recent report, rating agency ICRA Ltd estimated domestic air passenger traffic in March 2021 at about 7.7-7.8 million, or almost at a similar level to the year ago period, despite March 2020 recording low numbers due to the covid-led lockdown.

“Passenger traffic in March 2021 witnessed a marginal sequential decline of about 1% as compared to February 2021. The airlines’ capacity for March 2021 was around 2% higher than their March 2020 capacity (about 71,300 departures in March 2021, against 69,910 departures in March 2020)," the ICRA report noted.

The Directorate General of Civil Aviation (DGCA), India’s aviation regulator, is yet to release the passenger traffic data for March.

However, according to a previous set ofDGCA data, as many as 7.83 million passengers travelled by air in February, up from 7.73 million in January. This is still 36.71% below the numbers of February 2020.

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