Friday, March 20, 2020

What Impact Is Coronavirus Having On Indian Aviation?

The impact of the coronavirus on Indian aviation has been considerable. In the span of just three weeks, airlines have suspended international travel and cut domestic schedules. These moves come as governments place more restrictions on travel and the coronavirus shows no signs of slowing.
The trillion-dollar question in today’s world is how long will the coronavirus continue to spread? In India’s case, the number of cases only seems to be growing every day and shows no signs of slowing. This has caused the aviation industry to go into a tailspin, with demand evaporating overnight and stocks nosediving. However, things are only set to get worse in the coming weeks.
According to the Center For Aviation (CAPA), demand will fall 50% in the coming months. This will result in most airlines collapsing by May without any substantial government intervention. As India bans more travel, the international market will fall 70% and domestic by around 50%. Moreover, airlines will have to slash fares by nearly 25% per kilometer and ground a majority of their fleet. The only thing that is preventing airlines from collapsing earlier is the price of crude oil, which is at its lowest in recent history.
Airlines around the world have had a similar response, cut international routes substantially and scale back domestic operations. Most Indian airlines have followed the same idea. GoAir and Vistara have completely suspended their international routes while reducing domestic ones.
SpiceJet has also canceled all but a handful of international routes, while it evaluates its domestic routes. IndiGo, the country’s largest airline, has announced a 15% pay-cut for all staff and also cut around 70% of its international flights.
Air India has cut its cabin crews allowances by around 30-40% and withdrawn benefits from senior pilots, while also cutting all European and Asian flights from major cities and has been unable to pay salaries. AirAsia India, the venture between AirAsia and the Tata group, has announced it will stop expanding its fleet.
20/03/20 Syd Sharma/Simple Flying

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