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Aviation Industry Needs Immediate Support to Survive COVID-19 Impact: Celebi CEO | Interview

Image for representation. (AP)

Image for representation. (AP)

Amongst the impacted industries, Aviation is the most affected and need a direct immediate financial intervention, says Murali Ramachandran, CEO India, Celebi Aviation.

The global aviation industry is going through its toughest period since 9/11 and industry experts worldwide are seeking government support to keep air carriers, ancillaries and other pertinent service providers afloat. To understand the impact of Coronavirus on aviation industry, we got in touch with ground handling services expert Çelebi Aviation.

Çelebi Ground Handling was established in 1958 as Turkey's first privately-owned ground handling services company and has operations in 4 countries, at 40 stations including India. Here's our conversation with Mr. Murali Ramachandran, CEO India, Celebi Aviation.

What are overall preparations done by the industry towards being operational during the Unlock?

The recent times have been witnessing unprecedented challenges. Businesses and operations across the world have come to a standstill due to the pandemic. Post the lock down, operations came to a grinding halt down to 10% of pre-Covid levels. Domestic flights were opened in May and is currently operating at less than 30% of capacity. International flights are limited to re-patriation flights or freighters.

The industry, while taking numerous health related measures, is in the process of going through a digital transformation and getting ready to use new and better technologies. Most of them are being done with the intent of keeping transactions low touch and to minimize human to human interaction. Changes have been made in the check-in process, baggage handling processes, boarding processes and aircraft cleaning processes.

Technology that had been tested but not embraced adequately will now get the due attention and will come into play. Lot of provisions have been made to ensure adequate degree of social distancing. So, the focus now is on working together with all airport partners to make sure they remain open for business and ready for recovery when the time comes.

What are the new solutions Çelebi and overall industry has adopted to recover and sustain business?

To be honest this situation was unprecedented but in whatever manner we can re-calibrate we have been doing so over the last few months. On the Cargo warehousing front which has been operating even during the lockdown, we have done well in being able to support large freighter operations in the absence of regular international flights, some changes were required to support increased pharma movement.

COVID has forced us to rethink conventional business processes, use technology as much as possible and integrate all applications. We are also doing our best to preserve cash by reducing cash burn to the extent possible. We are continuously engaging with the Government and our airport operators to try and get meaningful fiscal support. We need to survive today to be healthy and viable tomorrow.

What is the future of Celebi’s Ground handling business?

Çelebi has two Aviation business verticals in India – Ground Handling and Cargo Warehousing. As a ground handler, Celebi covers 65% of the passenger traffic in the country in all the key metro cities such as Mumbai, Delhi, Bengaluru, Hyderabad, Ahmedabad, Cochin, & Kannur. Since March, ground handling has come down to 10%. That is, unfortunately, the situation with the aviation industry, which is at the forefront of this crisis.

Our dependency is primarily on flight operations and mainly on international flights, hence there is a huge impact on our business. If we talk about the future, we are uncertain of how the Covid-19 situation will pan out in the near to medium term, but we defiantly remain optimistic of its resurgence in the long term.

Going forward, one of the key tasks would be to safeguard the viability of the company and its businesses. We have been preparing for multiple expected scenarios. In case of the worst-case scenario, flights will come back to a level of around 40% of pre-Covid period by this year end. We do not foresee the business volumes to come back to 2019 levels anytime soon and may take a couple of years at least.

How will the safety of passengers be managed?

Our priority remains the well-being, health and safety of our employees, and our customers. We remain in sync with our customers’ expectations on this front. Various precautionary measures are being taken up - mandatory thermal scanning for all employees, usage of hand sanitizers for all employees, mandatory usage of face masks and other PPEs, enforcement of proper social distancing measures, limited entry of people in Public Transaction Lobbies, regular fumigation and disinfection of the cargo, warehouse, office areas and all the common areas. The company has also declared Arogya Setu App mandatory for all employees, in line with the guidelines laid down by the Government of India.

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What are the reforms/amendments required in the current policies?

Amongst the impacted industries, Aviation is at the forefront and probably the most affected. Announcement made by the Finance Minister may not bring any immediate relief to the industry. The industry at large needs immediate direct support to survive from the impact of COVID-19 pandemic.

Our Ground Handling and Cargo warehousing sector is heavily dependent on international flights and a few domestic customers. Since the lockdown and stoppage of international flights, our business has drastically slowed down. We have made multiple appeals to the government as well as the airports and do hope that the due support will come through.

We suggest that certain reforms should be included in the current policies like a short-to medium term capability to keep employees on a subsistence pay to avoid job losses, a review of the highly regulated environment and a meaningful interest free working capital support. We have also sought a moratorium of 180 days on all payment obligations to airports.