Tuesday, June 01, 2021

Second wave rattles Indian aviation to bones

Second wave of Covid-19 that began sweeping across India in March has brought Indian aviation sector to the edge as passenger traffic collapses again and hands back the gains made since autumn last year. All carriers face severe liquidity pressures and need urgent cash injection. Will the government help at least this time around?

On Sunday, the 11,675 employees of SpiceJet, India’s second-largest domestic carrier received an email informing them that their salary structures stood modified with immediate effect and that they would be paid only on the basis of number of hours worked. The airline blamed it on passenger traffic falling to under 10 pc of the levels before the pandemic hit India in 2020.

Unpleasant it may have been but the email should not have come as a big surprise to the employees. The country’s second largest carrier has been in deep trouble for a while as losses have mounted while passenger numbers have fallen dramatically from March onwards, after having begun to look smartly up since late last year as traffic rose steadily for at least four months before the floor gave way with the outbreak of the deadly second wave.

SpiceJet management can take heart from the fact that the carrier is not the only one facing a stark future, at least until the demand revives and if the number of fresh infections of coronavirus keep falling as they have over the last two weeks or so. In view of the drop in passenger traffic, from June 1 all airlines would be allowed to deploy only 50 pc capacity, down from 80 pc earlier, as number of air travellers in April stood at 5.7 million as against 7.8 million in March.

Data by ICF says that GoAir and Air Asia India were the fastest to respond to the market developments as the former’s departures dropped 62 pc from 201 on April 1 to a mere 77 on April 30 and latter’s numbers dropped to 55 from 161. Market leader IndiGo was slow on feet as its total departures shrank by only 28 pc and operated 31,516 flights in April, about 52 pc of all domestic flights. SpiceJet cut its flights by 47, but evidently nowhere enough to cushion the shock of a collapsing market.

01/06/21 Ranvir Nayar/Media India Group

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