Aviation consultancy CAPA on Monday called for a "clear strategy" to deal with the turbulence that the domestic airline industry has been navigating in due to the coronavirus pandemic in the wake of demand slump and travel restrictions coupled with "regulatory challenges". In a series of tweets, CAPA India also said the viability of the Indian aviation industry will be "critical" to support the country's economic recovery after COVID-19.
Domestic passenger services resumed on May 25 after nearly two months of suspension due to the coronavirus-induced lockdown, while the ban on scheduled international flights remains in place since March 22. At the time of resumption of services on the local air routes, the government had allowed airlines to operate not more than 33 per cent of their pre-COVID-19 domestic flights, which was later increased to 45 per cent on June 26. The civil aviation ministry also restricted the airlines on their ticket pricing also by making them range-bound seven fare bands, classified on the basis of flight duration, till August 24.
Both capacity restriction and fare caps have now been extended till November 24. "India needs a clear strategy to deal with this crisis. If the decision has been taken to let the industry find its own feet, then this should be communicated. But, if a specific plan to support the sector is being developed, it needs to be revealed as soon as possible," CAPA India said in a tweet.
Indian aviation is headed for a challenging future given the regulatory constraints imposed on the sector, it said in another tweet, adding that the domestic capacity is limited to 45 per cent while the fare bands have been extended for three months. It further said in the tweet that international travel is restricted to a "handful" of travel air bubbles.
An air bubble is a bilateral arrangement with a set of regulations and restrictions in which the carriers of the two countries can operate international flights. International flights have been resumed in specific air bubbles after a long suspension since March 22.
International flights have resumed in specific air bubbles after a long suspension since March 22, in the wake of travel restrictions due to the coronavirus pandemic. "The situation is exacerbated by the fact that demand is weak. Load factors are just 50-55 per cent even with limited operations. And, all this is happening at a time when most carriers have no cash and raising capital is challenging," CAPA India said in another tweet.
Last week, the aviation consultancy and advisory services provider warned that one or two domestic carriers could go bust for want of cash. It had also said the decision by the largest domestic carrier IndiGo to lay off 10 per cent of its staff was the beginning of a "painful process".