Domestic Departures Breach 1,000-a-Day After Second Wave Slowdown

Domestic departures Wadia GoAir Flights - Aviatorsbuzz
A file picture of a GoAir aircraft during pushback. Source: atc.spotter

The number of domestic departures recorded in the country on Friday, June 11, 2021 was 1,070. This marked a positive sentiment as domestic flights crossed over a 1,000 departures a day after a 33-day gap.

This marked a welcome shift in recent times as the second COVID-19 wave that hit the country over the past few months saw domestic air passenger traffic plummet and losses in the Indian aviation sector swell.

As aviation analyst and columnist, Ameya Joshi noted in a Tweet on May 18, 2021: “We are back to where we began last May. On May 18, India saw only 641 flights which carried 39,370 passengers When domestic commercial aviation restarted last May, the first day had recorded 39, 231 passengers on 532 flights.”

COVID Affect on Domestic Travel

The Hindu Businessline reported that last month, with COVID-19 tightening its grip on the entire country, just two million domestic passengers ventured onto flights. That figure was down from 5.7 million the month before and was a massive decline from the 12.2 million travellers who flew in May 2019 when there was no coronavirus.

Centre for Asia Pacific Aviation (CAPA), which provides market intelligence to the aviation industry, makes a startlingly grim admission in its annual outlook that, “We have run out of words to describe the state of Indian airlines.” Its just-released report proceeds in a similar gloomy vein: “The industry is standing on the edge of a cliff. This is true even for airlines with access to large pools of capital.”

CAPA in its forecast said airline losses of $8 billion for FY2021 and FY2022 combined. The airlines racked up losses of $4 billion last year and CAPA expects a repeat this year. The red ink spilled in 2021-22 will be split almost equally with full-service carriers losing $2.1 billion and low-cost carriers losing $2 billion.

As per CAPA airlines will need $5 billion to stay aloft but only have access to $1.1 billion through share offerings and other sources.

The Hindu Businessline report said that just as the CAPA report came out, IndiGo gave a rude reminder of how bad things are by reporting fourth-quarter losses ballooned to ₹11.5 billion, outstripping analyst forecasts of ₹4.5-billion loss and bigger than its ₹8.7-billion loss for the same year-earlier quarter.

LWP Implemented

The newspaper report said that the budget airline advised staff it’s implementing a leave-without-pay policy and not anticipating a return to profit until next year. To carry on, the airline is trying to increase borrowings. But even though it has reserves of ₹180 billion, it’s got a debt of ₹298.5 billion.

Despite the year’s bad start, CAPA reckons passengers will total 80-95 million this year, significantly more than last year’s 52 million passengers. But there’s the big caveat that if a devastating third wave materialises, the industry will be knocked out of gear again and final numbers are likely to be closer to 80 million. That’s far short of the 140 million who boarded domestic flights in 2019, the last normal Indian aviation year.

Aircraft Grounded

Many planes have just been grounded or are flying only for a few hours each day. On May 10, for instance, only 961 domestic flights took off, compared to the over 2,000 planes that flew daily before COVID-19 struck.

To cite an example of how the number of flights has fallen, the busy Mumbai-Thiruvananthapuram domestic route which had around three to four flights daily now has four flights a week. Other flights have been taking off with just a handful of passengers.

Delhi Airport, which in pre-COVID days had over 2,00,000 passengers passing through its portals daily, suddenly found that number had dropped to between 30,000 and 40,000.

In mid-May, Delhi airport closed Terminal 3 and announced all flights would take off from Terminal 2. Mumbai’s Chhatrapati Shivaji airport is also operating from one terminal.

And there is no chance also international flights can pick up the slack. The huge number of COVID-19 cases in April and May has meant India is on most countries’ ‘Red List.’

CAPA projects international traffic of 16-21 million passengers but warns this is likely to be on the lower end of the spectrum and anyway can’t be predicted because it depends heavily on governments around the globe. Indigo isn’t expecting any international traffic recovery before the fourth quarter.

domestic IndiGo - aviatorsbuzz

All this is a far cry from a few years ago when the airline industry was struggling to cope with runaway growth. Between 2014 and 2018, the industry almost doubled in size with growth of 20.8 per cent in 2015 and 22.2 per cent in 2016. In 2017, growth stayed high at 18.2 per cent and that was followed by 18.6 in 2018.

The result of those go-go years was that the industry planned ahead for an era of limitless growth. Delhi airport, built to handle 60 million passengers annually, suddenly found it had 69.2 million in FY2018-19. It then embarked on an expansion that would enable it to cope with 100 million passengers. The government also pushed ahead with its plans to build second airports like Navi Mumbai and Jewar to cope with excess traffic.

The airports are also squeezed in a different way. Airports have huge fixed costs and can’t easily lower spending. Similarly, it’s not even possible to reduce large staff numbers because they are needed to keep airport facilities in working order.

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