NEW DELHI: The impact of the Coronavirus outbreak on the country’s aviation sector is expected to go up so much that some airlines might be left with no choice but to shut down their operations, a report said.
According to a recent report by aviation consultancy firm Capa India, the COVID-19 pandemic may force Indian airlines to ground up to 150 aircraft as the government restricts travel to control the spread of the virus.
As of now, Capa estimates that consolidated losses for all airlines in India, except Air India, in Q1 are expected at $500-600 million but this is bound to be revised downwards later.
“As a result of the significant reduction in flying, Indian carriers may initially ground around 150 aircraft (including almost all of the international fleet), with this number expected to increase as more domestic operations are curtailed over the coming weeks ... If the decline in traffic continues to be severe, the majority of the fleet could be grounded by April,” Capa said in a report titled ‘Impact of Covid-19 on Indian aviation’.
Indian carriers have seen a 12-15 per cent dip in yields during the first two weeks of March and this may fall by 25 per cent or more in the near term, it said. Forward bookings are down by more than 30 per cent too, indicating dark clouds for the Indian aviation industry, it added.
CAPA has made a number of suggestion such as Jet fuel prices on a weekly basis and implementing a short-term moratorium, to the government to overcome the crises. It, however, added, that regardless of any fiscal concessions and support that the government may offer, most airlines will have to shrink their operations, and the more vulnerable carriers may shutdown.