Covid-bitten Indian aviation punches back, but still quite shaky
Following lifting of the Covid-induced travel ban, the number of air passengers trebled and the number of flights more than doubled in about three-and-a-half months
India opened its skies for scheduled domestic travel on May 25, after a gap of two months, following the nationwide lockdown imposed to prevent the spread of the novel coronavirus.
The start was gingerly and civil aviation minister Hardeep Singh Puri pointed out that on May 31, there were only 501 flight departures and 502 arrivals, carrying 44,593 and 44,678 passengers respectively. Air operations were started at just around 30% capacity after factoring in social distancing norms.
Domestic operations on 31st May 2020 (Day 7) till 2359 hrs.— Hardeep Singh Puri (@HardeepSPuri) June 1, 2020
44,593 passengers handled.
44,678 passengers handled.
Total movements 1003 with 89,271 footfalls at airports.
Total number of flyers 44,593@MoCA_GoI @AAI_Official pic.twitter.com/njAbeDJdgv
Since then, scheduled domestic air traffic has got busier. The government raised the capacity limit to 45% by the end of June, but still, passenger demand remained subdued till mid-July.
In September, the airlines were allowed to increase the number of their domestic passenger flights to 60% of the pre-Covid times, and that helped the Indian aviation sector to see some green shoots. According to a Hindustan Times report on October 8, airlines are operating at 65% capacity and will soon be allowed to raise it to 75%. A full recovery, though, is still some distance away. Puri, however, expects the domestic aviation sector of the country to reach full capacity by the end of this year and surpass the pre-covid number by the first quarter next year.
By August 26, there were over 1,000 domestic flights and the sector breached the milestone of 1 lakh domestic passengers in a day. Airport footfalls crossed 2 lakh.
Sky full of milestones!— Hardeep Singh Puri (@HardeepSPuri) August 27, 2020
More than 1000 flights.
More than 200K passenger footfalls at airports.
Now we cross the milestone of more than 100K domestic passengers in a day!
Civil Aviation sector flies high.
Congratulations to everyone who has made this achievement possible. pic.twitter.com/sGb9rehxE9
A new high was attained on September 13 with 1,43,811 domestic travellers for departure on 1,298 flights. On the other hand, 1,43,717 passengers arrived on 1,294 flights.
Thus the number of air passengers trebled and the number of flights more than doubled in about three-and-a-half months from the last week of May to the second week of September.
A new high in the sky.— Hardeep Singh Puri (@HardeepSPuri) September 14, 2020
Number of domestic travellers on Sunday, 13 Sept 2020 touches 1,43,811.
Reflects how flying is being considered a safe mode of travel as India continues to emerge stronger in the fight against COVID19.
Congratulations to our flyers & stakeholders. pic.twitter.com/zj5JJ49qfO
On an average, the number of daily passengers grew by nearly two-fold from 64,396 in June to 1,24,609 in the period between September 1-19, according to an Economic Times report, attributing it to the Directorate General of Civil Aviation (DGCA).
The report added that the average daily flight departures and passengers per departure rose from 713 to 1,243 and from 90.6 to 100.5 respectively in the same three-and-a-half-month period.
An aviation analyst interviewed by the daily explained that the growth in traffic was due to pent-up demand as a result of people being stranded due to the lockdown and those wanting to catch up with their near and dear ones. It was, however, not as a result of leisure or business travel.
According to the latest data shared by the civil aviation ministry, there were 1,525 departures carrying 1,56,565 people on October 7, while 1,529 flights arrived carrying 1,57,979 passengers.
Puri informed that in exactly four months since the recommencement of domestic operations, over one crore passengers have travelled on more than one lakh flights. "Moving towards pre-covid figures," he asserted.
More than One Crore passengers on 1,08,210 flights since recommencement of domestic operations on 25 May 2020.— Hardeep Singh Puri (@HardeepSPuri) September 25, 2020
Moving towards Pre-COVID figures.
Congratulations to all stakeholders on achieving this milestone!
We continue our journey towards creating an #AatmaNirbharBharat. pic.twitter.com/jOCJDvCeK8
This points towards a slow but steady rise in domestic air traffic despite the bloodbath that the aviation sector witnessed during the lockdown. Air traffic had completely come to a standstill as the entire world went indoors to save itself from the coronavirus, and scheduled international passenger air travel continues to be suspended in India.
A large part of the traffic has come from the Tier-2 cities like Guwahati, Patna and Srinagar to Tier-1 cities, Moneycontrol reported, quoting aviation consultancy ICF. In fact, flights from Tier-2 to Tier-1 cities were 2.5 times that of flights between Tier-i cities.
A Crisil report states that Indian airlines could lose Rs 1.1 to 1.3 lakh crore in terms of revenue over the fiscals 2020 to 2022 as a result of the pandemic. The fall in demand will lead to a 40-45% shrinkage in domestic traffic and 60-65% shrinkage in international traffic this fiscal, and as a result of capacity curtailment, the airlines may not be able to take advantage of the expected fall in crude oil prices to $38-42 in fiscal 2021, the report said.
Crisil expected domestic air passenger numbers to be 78-83 million this fiscal, which is at par with the fiscal 2016 level. The demand may pick up in the third and fourth quarters with the advent of the festive season, but still is going to be lower on-year. The traffic situation is not expected to rebound even in 2022 if the pandemic cannot be brought under leash by that time.
According to a Moneycontrol report, IndiGo, which controls 59% of the domestic market, for example, posted a net loss of Rs 2,844.3 crore in the first quarter of 2020-21 as air travel remained suspended for the most part of the June quarter due to the lockdown. The airline had earned a net profit of Rs 1,203.1 crore in the same period last year. Revenue declined by a whopping 91.9%, while capacity dropped by 90.9%.
Likewise, SpiceJet, lost Rs 600.5 crore from April to June 2020 unlike a net profit of Rs 262.8 crore in the same period last year. Consolidated revenue from operations fell to Rs 521 crore translating into an 82.6% year-on-year decline. Another low-cost airline Air Asia India reported a loss of Rs 332 crore in the quarter ended June.
However, worryingly, there were a number of flight cancellations alongside the rise in air traffic. According to DGCA data mentioned by the Moneycontrol report, the cancellation rate was 6% in July and 4% in August. To put things in perspective, in January, before Covid-19 gained ground, the cancellation rate was just 1.7%, despite the number of flights in the Indian skies being three times of what it is now.
Fifty per cent of all the cancellations in July and 44.6% of those in August were in the nature of commercial cancellations, which indicates that there was lack of passengers either on the onward or return journey or both. In January, commercial cancellations were merely 2.5%.
In August, SpiceJet, Air Asia India and even regional player Alliance Air operated over 80% of the intended flights, while IndiGo flew over 90% of its scheduled flights. Vistara and GoAir's numbers were 73% and 68% respectively. National carrier Air India came last among the major Indian airlines, with an abysmal 56%, which points towards a very high cancellation rate.
The massive blow dealt by the Covid-19 pandemic to the Indian aviation sector can be gauged by the fact that passengers carried by domestic airlines from January to July this year were 3.72 crore as against 8.25 crore during the same period last year. This translates into a sharp 54.84% fall on a year-on-year basis.
In spite of the various safety measures undertaken by the Indian airports and airlines, headwinds for demand have ranged from varying quarantine rules and weekend lockdowns in different places in the country, bans on flights from certain cities with high Covid-19 caseloads (for instance, West Bengal had banned direct flights to Kolkata from Delhi, Mumbai, Pune, Nagpur, Chennai and Ahmedabad), perceived inconvenience due to elaborate safety protocols in airports and on flights and the fear of contracting the coronavirus.