When Covid 19 pandemic started:
Aviation
sector play important role in Indian economy, we cannot think about abroad
without Aviation sector. Nowadays, It is very easy to move any country if you
have visa of that country where you want to go. Even In some countries there is
no need of visa for Indians or we can say on arrival visa is the option for Indians
in some countries. Before 23rd march and 25th march 2020,
everything was running very smooth with Indian aviation sector. Even there was
some good news into the Indian market about the enhancement of the foreign
direct investment in Indian aviation sector. Suddenly every changed, when pandemic covid-19 had given knock into
India & Many international fights &domestic flights suspended due to
covid-19. It was very shocking news for whole world.
Countries
like Australia, New zealand closed their International borders. It was
very surprising for whole world but it was precautionary measure these countries,
after few days, everyone heard many news into the media that other countries
also close their international borders. It was sad news for aviation sector but
Governments of such countries had taken this decision to save the lives of
their country people which were a good step for all.
Impact
of covid 19 pandemic on International flights & on Airline companies:
The
covid-19 had impact on the aviation sector at massive level. Due to this
impact of covid, Aviation sector faced major losses in 2020-21. Many airlines
had sent their employees on leave without pay.
The losses of the Airlines of India are on higher side due to this
pandemic. For example, If we will
check the data then Indian major airlines like Indigo airlines posted a net loss of nearly 2882cr In first Q! And in
Q2 it posted the net loss of 1194cr nearly in the same fiscal year. The India biggest
domestic airline Spicejet ltd faced
huge loss of 600cr in Q1 & 112cr in
Q2 in same fiscal year. These losses were biggest for any airline company.
Decrease
in number of passengers & estimated losses:
During this pandemic time Indian government
permitted some international flights under the name of the mission VANDE BHARAT. But the commercial
flights were still suspended. As per the
Data published by the Aviation ministry, in 2019-20 nearly 205 million
passengers travelled to India. Out of these 205 million passengers, 140 million
passengers were domestic & 65 million were international. In the response
of new research & data, it is estimated that only 10 million international
passengers will travel in 2020-21. If it happens then it will be biggest loss
for the Indian aviation sector. Even it is a setback for the Air India revival
plan which was already suffering from the loss. It is also estimated that Indian aviation Industry will face loss of 6
to 6.5 USD billion in FY21. In this projected loss, airlines will face the loss
of 4 to 4.5 USD billion. It will surely hit the government disinvestment
plan Air India and date of
expression of Interest had extended, it had already extended five times in the
past. As on 31st march 2019, Air
India was carrying the debt of 58, 255
crore. Later on, nearly half of the debt of Air India transferred to Air
India assets holding company ltd. The jet
airways is another example of huge debt ridden company and waiting for the
revival. Jet airway also went for bankrupt
in April 2019. These all planes has postpone due to covid pandemic. Even
Second largest Delhi Airport project is
still under process or delay.
Due to this pandemic many airlines had
taken strict action by firing or pay cut of the employees in 2020. The airlines
like GoAir, sent many of its
employee on leave without pay. Air India had also taken strict action by
cutting their employee salaries by 10% as per media news. Further the domestic
airlines companies like indigo and Spice
jet ltd had followed same step & cut their employees salary by 10 to
30% or some others by 5%. The other big name Air Asia has cut their senior employees salaries by 20 percent.
Current
situation of Indian Airlines:
There is no any question that the
tough time is going in the Aviation sector and it is not limited to India only
but also in other countries like china,
Uk, US, Australia, Canada but rest of the countries have more cash and
these countries may announce stimulus package to this sector but India is
already under debt and covid 19 has also
left impact on other industries of India. Aviation sector is already under
higher debt and it is very expensive sector too. We may see some improvement in
coming few months because covid situation is under control in all countries and
vaccination drive is also running good in India. But the situation is still
uncertain for this sector because different strains of corona virus has
predicted in the recent time. But vaccination
has given lot of hopes to airlines companies. If Commercial flights will restart
then vaccination passport will play important role in this sector and responsibility
of airlines companies will be increased. Keep the air ticketing pricing at
lowest levels is also a biggest challenge for the airlines companies those are
already under deep debt. Recently Airport
authority of India reports big fall in revenues which is 92% approximately.
Also, CAPA India estimated that jobs will fall
in this sector by 30 percent which is a big damage. The other wing of this
sector, Indian carriers also faced decline in revenue by 86%.
In
nut shell, We can say that Indian aviation sector is under deep trouble and
it will be very challenging for the current Government to come up with
promising plan for this sector. Even big investors of the Indian stock market
have shown interest in the Indian aviation sector. Even many of Airlines stock
had given good run up in the past few weeks but it is not enough because stock
price movement cannot be relate with the current financial situation of the
sector. Once the pandemic situation will be improved in India and in other countries
of the world, it will increase the confidence of the people to move around any
country where they were planning to go. It may help to increase the revenue of
aviation sector in coming months.
Also read: Impact of industry on Indian Economy
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