Indian airlines are bleeding heavily financially while the domestic tourism and travel services industry is facing upheavals as international flight operations from the country continue to be grounded due to high coronavirus infection cases.
The Indian Government recently announced a further extension of the ban on international flights running through until August 31, although it will allow cargo flights and flights under the bilateral air bubble pacts with select countries to continue to operate.
As per the earlier announcement, the ban on international commercial flights to and from India was to end on July 30 after a 16-month gap.
“The airline’s revenue is badly hit [due to the continued ban on international flights] and we are currently managing [with] return sector traffic from some of the Gulf countries, Kuala Lumpur and Singapore,” a senior official with Air India Express, which mostly operates on international routes, told Arabian Business.
“A silver line for Air India Express is the India-Doha route which we are doing from India with full loads as demand is excellent,” the airline official added.
Jay Bhatia, vice president of the Travel Agents Association of India.
Leading Indian budget airline Indigo posted a record $427 million loss for the April-June quarter of 2021, while research firm Centrum Institutional Research expected the loss of SpiceJet – another listed Indian budget carrier – to widen to $66m in the same quarter, higher than the $32m loss the airline posted in the opening six months of the year.
Unlisted Indian carriers such as Air India, Air India Express and Vistara do not make their financial numbers public.
Airline industry officials said despite a steady recovery in domestic travel in India since mid-June, carriers are continuing to be hurt by the rising international crude prices and rupee depreciation – the latter leading to increased outflow for leasing of aircraft by the airlines.
The impact of the continued ban on international flight operations from India by both India and a few other countries, including the UAE, is also having a hugely detrimental impact on the travel and tour operators industry in India.
The industry is said to be facing a massive upheaval, with a large number of small and medium firms having either already shut shops or are in the process of downing shutters, while the large firms have resorted to major ‘right sizing’ of employee strength and operating with bare minimum staff.
“All [our member firms] are on dormant mode anyways,” Jay Bhatia, vice president of the Travel Agents Association of India (TAAI), told Arabian Business.
“Globally airspace is opening up at a much faster manner, whereas internationally from India the commercial aviation is at a standstill. India is on a way to recovery [on the Covid pandemic front] and it’s high time skies are opened up, else the airlines will [also] show darker shades of red,” Bhatia said.
The TAAI senior executive, however, said there was a ray of hope now as corporate travel in India has commenced slightly and there is an expectation of doubling in the domestic airspace in the next three months.
Bhatia earlier told Arabian Business that the industry body was not sure how long many of its member firms could survive, while continuing to bear the operational costs.
Senior executives at other travel services companies also said the continued ban on international flight operations from and to India would land a big blow on the country’s travel and tourism industry.
Research firm Centrum Institutional Research expected the losses of SpiceJet to widen to $66m in the second quarter of this year.
“The ban on international flight operation by India till August 31 will take more toll on the industry – both travel and tour – which has already been suffering badly for the last several months,” Bhushan Kamble, regional manager – sales at Mumbai-based Akbar Travels, told Arabian Business.
“It’s, however, a sign of relief that the US has started accepting Indian students, Qatar has started accepting travellers from India and even the Maldives has opened its borders for Indians,” said the senior executive of Akbar Travels, which has been organising alternate travel route options for desperate passengers from India wanting to travel to many overseas destinations for joining their work places or to attend urgent business meetings.
Though India has extended the ban on international flights, the Indian regulator Directorate General of Civil Aviation order said international scheduled flights may be allowed on select routes by the competent authority on a case-to-case basis.
Scheduled international passenger services have been suspended in India since March 23 2020 due to the Covid-19 pandemic.
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