Wings clipped in the near term

Curtailed mobility of people due to the Covid-19 pandemic and related restrictions will shrink India’s air passenger traffic in both domestic and international sectors by 40-45% and 60-65%, respectively, this fiscal.

The demand destruction can be gauged from the fact that even after resumption of domestic air services, the load factor is hovering at 50-60%, with primarily unidirectional flow of traffic, limited largely to essential travel and those returning to their home cities/ countries.

In the milieu, Indian carriers are expected to log operating losses this fiscal despite lower crude oil prices. And with the Covid-19 pandemic still raging in much of the world, a revival to pre-pandemic levels appears unlikely even next fiscal.

This is a serious jolt to the Indian domestic air travel industry that had logged double-digit growth in seven of the past ten fiscals before its fortunes took a turn for the worse with the bankruptcy and grounding of a couple of major carriers.