Sunday, October 11, 2020

Cash shortage, rising costs trouble aviation sector

New Delhi: Despite the civil aviation market in India picking up slightly in terms of passenger traffic, the industry is worried over their future due to massive cash shortages and increasing operating costs.

A senior official of one of India’s leading low-cost carriers (LCC) told The Sunday Guardian that the aviation sector in India is on a ventilator and that if operations are not started in full-scale, many would have to shut their shops. 

 “Aviation sector is a cost intensive sector, each flight that takes off has a huge amount of money spent on it–in terms of its parking fees, operation cost, staff salaries, fuel prices etc, but on the other hand, the ticket prices are very low and, in such circumstances, it is becoming very difficult for airlines to keep themselves afloat. The pandemic has hit the aviation sector the hardest and there should not be a doubt about that,” the airline official quoted above said.

“We don’t have money to pay salaries, the sector is operating with just 60% of its capacity compared to the pre-Covid era. The passengers are still not confident of flying and we don’t see this recovering to pre-Covid situation any time soon. We are having to cancel flights because seats are going empty and we cannot fly planes which have like just 10 to 15 passengers,” the airline official said.

Another airline officer told this correspondent that they have been in talks with the government and have asked the government to step in to help them. “The aviation sector is burning money; the industry is cash-strapped. The government has done very little for the industry in terms of providing benefits and help to this industry. Air Turbine Fuel (ATF) prices in India are one of the highest in the world; operation costs in India are also one of the highest in the world. Aircraft maintenance cost is also one of the highest and when passenger traffic is not seeing the growth it was expected, how can airlines keep their business running with such high costs. The government, on the other hand, says that they have nothing much to do and they can do only so much,” another official from a scheduled carrier told this correspondent. According to the Ministry of Civil Aviation, the revenue for the civil aviation industry in India has reduced by 85%, from Rs 25,517 crore in the first quarter of 2019 financial year (April-June) to just Rs 3,651 crores during the same period this year.

The pandemic has also left one of India’s low-cost carriers Air Asia on the brink. Air Asia, which is a joint venture between Tata and the Malaysia operated AirAsia group, is trying to raise money to keep themselves afloat. In India, they are hoping that Tata, which holds 51% stake in the airline, would infuse some money into the airlines to keep it flying.

There has also been a sharp fall in the passenger traffic in India between March and July this year compared to the same period last year. As against 5,85,30,038 domestic passengers carried by Indian air carriers between March to July last year, the India carriers flew just 1,20,84952 domestic carriers this year in the same period.

10/10/20 Dibyendu Mondal/Sunday Guardian Live

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