Thursday, October 15, 2020

Airlines caught in turbulence

Hit hard by the coronavirus pandemic that forced people to abort their travel plans, the aviation industry is looking at darker days ahead. The impact has been particularly disastrous for the Indian aviation sector, so much so that the country’s largest airport operator, state-run Airports Authority of India (AAI), has been forced to borrow Rs 1,500 crore for working capital requirements this year as it stares at a rare net loss. Though the situation is grim for airlines and airport operators, the government has done little to assuage the concerns of the industry. The aggregate revenue of Indian carriers came down 85% from Rs 25,517 crore in June quarter of last year to Rs 3,651 crore during April-June 2020. Air India’s revenue fell to Rs 1,531 crore from Rs 7,066 crore in the same quarter last year. The revenue of airport operators was only a fraction of last year, down by nearly 85% to just Rs 894 crore against Rs 5,745 crore earlier. The pandemic cost nearly 18,000 people their jobs between March and July. The lockdown reduced air traffic to a fraction of what it was prior to the pandemic. Regulatory restrictions on flight operations by domestic and international sectors have led to a severe curtailment of operations and sub-optimal aircraft utilisation. International traffic reduced by 87% from 93.45 lakh to 11.55 lakh during the same period. The International Air Transport Association (IATA) estimates that the global aviation industry is staring at a loss of $84.3 billion, with the financial viability of many airlines coming into question.

Though some international airlines have resumed operations in India and are part of the air travel arrangements that have been signed with countries like the UK, the US and France, these are only temporary bilateral arrangements aimed at restarting commercial passenger services. Given the alarming rise in the number of Covid-19 cases and deaths across the country, the aviation industry is far from being out of the woods. Even if air traffic increases in near future, paying the debts will be a challenge and airlines might have to increase fares, driving away passengers at a time when they are supposed to be lured to avail services.

15/10/20 Telangana Today

To Read the News in full at Source, Click the Headline


Post a Comment