For India's airlines, domestic demand more than compensates for slow return of international flights

Stock - India Airport — If it's domestic, India's airlines are doing well. But on the international routes, there is a lot of re-openings that they will have to get through. Image Credit: Bloomberg

Dubai: It hasn’t taken long for India’s domestic air travel to stage a recovery after the COVID-19 halt to services.

Passengers carried by domestic airlines between January-August were about 46 million as against 40 million last year, which works out to an impressive 14.78 per cent gain year-on-year, according to official data. “The sustained recovery in demand can be attributed to a couple of things - one being the falling cases since the second wave of Covid and the second being the rising vaccination rates,” said Vinamra Longani, Head of Operations for Sarin & Co., an Indian law firm specializing in aircraft leasing and finance.

“The fact that Indians continue to face restrictions for traveling abroad to various countries has been a boom for domestic travel. There is a lot of ‘revenge’ travel happening.”

This is not the only good news for India’s airlines – the country’s aviation ministry recently increased the passenger capacity of airlines to 85 per cent from 72.5 percent. The move comes ahead of India’s long festival season, including the all-important Diwali, that usually starts in October and goes on until year-end.

“This is one of the two quarters where India’s airlines make most of their money and key for overall profitability,” said Longani.

More options coming

Next year, Indian passengers will have more flight options. Jet Airways - now owned by a UAE-based investor – plans to resume domestic operations in the first quarter of 2022, with an inaugural flight from Delhi to Mumbai. “We just have to wait and see how this actually pans now that the resolution plan for the airline is approved by NCLT (National Company Law Tribunal),” said Longani.

Even with a regulatory go-ahead, it need not be all smooth sailing for Jet. Former Jet employees and a creditor - Punjab National Bank - have filed appeals with the NCLAT. Should these appeals succeed, they could “really put a spanner in the works,” said Longani.

Akasa, the ultra-low-cost airline backed by Indian billionaire Rakesh Jhunjhunwala, is aiming to start operations by 2021-end.

International does OK

Since the lifting of restrictions on flights from India, travel has taken off to destinations such as UK and the Middle East. Doha was the top international destination from Mumbai in August followed by Dubai and Male, as easing of travel curbs in key markets boosted passenger numbers at India’s second busiest airport.

The Qatari capital emerged as the top international destination with about 41,410 passengers to and from Mumbai’s Chhatrapati Shivaji Maharaj International Airport. This was followed by Dubai and Male, with 37,126 and 18,190 passengers, respectively.