Tuesday, April 07, 2020

With skies empty, aviation industry runs out of adjectives for its agony; recovery only after a year

Aviation industry in India will take a year to recover to normalcy as the current coronavirus crisis takes a massive toll on airlines across the globe. “For India to return to a pre-COVID operational fleet of 650 aircraft is likely to take up to 12 months from the time that restrictions are lifted, and this may be conservative,” industry advisor CAPA said in a report on Monday. The airlines now stare at slow recovery as travel remains suspended, slow or even negative GDP growth, broken supply chains, and low consumer confidence. In fact, the industry is now running out of adjectives to describe its agony, CAPA added in the report.
With flight operations suspended across the globe, global aviation activity has slumped to one-third of the normal levels in the last month, according to data curated by Flightradar24. “In India the decline in aircraft movements has been even more dramatic, with the government having suspended all scheduled domestic and international flights until 15 April 2020, a date which may be further extended,” CAPA said. While several of the country’s vulnerable airlines will manage to survive, the Indian aviation sector is still going to shrink considerably. The airlines are right now operating with additional aircraft and for the next 6-12 months, they will have about 200-250 surplus aircraft, according to CAPA estimates.

The industry has already started to surrender under the pressure with several major airlines announcing paycut for employees. While India’s largest airline IndiGo announced a salary cut for its top management, Ajay Singh-led SpiceJet also said that it will cut salaries by 10-30% for its top and mid rung management. MD Ajay Singh said that he will bear the majority of the salary cut for March pay. SpiceJet also returned five of its wet-leased Boeing 737 aircraft to Turkey’s Corendon Airlines to keep costs in check.
07/04/20 Prachi Gupta/Financial Express

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