NEW DELHI: Early last week when aviation minister Hardeep Singh Puri announced that India would open its domestic sky from May 25, the move was widely welcomed by the crises-hit aviation sector who had little or nothing to receive from the government’s Rs 20 lakh crore stimulus package. Soon after, share prices of IndiGo and SpiceJet jumped and immediate bookings in large numbers were made by passengers.
The excitement, however, was short-lived. Stringent quarantine norms announced by some states and restriction on flight operation caused immense pain to passengers on day one. As many as 630 flights were cancelled on day one. The chaos and difficulty in resuming operations dented gains made by stocks last week. Share prices of Indigo and SpicetJet fell 3.40 per cent and 2.22 per cent, respectively on the BSE on Tuesday.
A bigger blow came to the sector, when a passenger travelling in an IndiGo flight from Chennai to Coimbatore on Monday was found to be Covid-19 positive. “This is going to have a big impact on the sentiments of passengers who are already uncomfortable flying at this point of time. If more passengers are found Covid-19 positive in the coming days, we don’t know what steps the Union/State Government might take” said a senior executive of a private carrier. He added that institutional quarantine announced by some states and delay in opening up operations in states such as West Bengal and Andhra Pradesh is already weighing on the recovery of the sector.
West Bengal will resume on May 28 with just 10 departures and 10 arrivals daily.
Low demand for flights is also impacting airfares, which is almost similar to pre-COVID days. According to Nishant Pitti, co-founder of EaseMyTrip.com, average fare in sectors such as Delhi - Mumbai is around Rs 3900 while in Delhi- Bengaluru it is around Rs 4900.
He says that flights to Bangalore will be reduced by airlines as passengers are avoiding travel there because of mandatory quarantine. Also, the Chennai e-pass website is down most of the time, impacting flights to the southern state.
However, easing of relaxation in quarantine for Mumbai travellers and expected opening of Kolkata improved bookings on Tuesday. "So far limited cancellations have been seen. Overall, the second day for sure is better than the first," Pitti said.
Despite opening up, experts feel the sector needs capital infusion to survive the pandemic. Rating agency ICRA in a recent note said considering the daily net loss of Rs 75-90 crore during the shutdown of operations and the expected weak demand, the Indian aviation industry will require additional funding of Rs 325-350 billion over FY2021-23.