Dubai: India’s airlines will find it difficult to survive if they are not going to get access to immediate government funding support in the way carriers in the Gulf, the US and Europe managed. The government had announced multiple stimulus programmes since the pandemic struck – but none of it have resulted in funds reaching the country’s ailing airlines.
“There are some government regulations including price floors and price caps, but very little [financial] support,” said Brendan Sobie, aviation analyst. “Airlines are not receiving loans or wage subsidies.
“When you compare how governments have supported airlines globally, India is lacking. Many countries have been supportive and this reduces the pressure on airlines - for example as we have seen in the UAE.”
Dubai has reportedly pumped in Dh7.3 billion ($2 billion) into Emirates airline as fresh equity since March, helping the company tide over an exceptionally difficult phase for the industry.
No help from domestic
While regular international flights are still some weeks away, India’s carriers could have used domestic services to get cashflow back into their operations. In fact, China’s aviation sector managed a far quicker turnaround helped by demand generated via domestic travel.
But so far in India, re-launch of domestic services have been met with muted demand. As such, intense competition will always ensure ticket rates remain tied to bare minimum levels.
“Domestic traffic in India is still down over 70 per cent,” said Sobie. “India is still under-performing compared to the average domestic demand in Asia or globally. Airlines really need a stronger domestic recovery plus the resumption of international. “What we need in India is a more significant and faster recovery.”
For now, repatriation flights seem to be the only service that's seeing optimum passenger numbers, but the mission-related services should wind down soon.
A slight lift
Airline industry sources reckon some improvements between November 1-20 as India gears up for the all-important ‘Diwali’ festival season. “We do believe travel will pick up around this season,” said a spokesperson at Vistara, a joint venture between Tata Group and Singapore Airlines. “However, passengers’ considerations will still largely depend on health and safety measures - and quarantine requirements.”
India’s Minister of Civil Aviation, Hardeep Singh Puri, certainly believes in Diwali brining back cheer for the airline sector. He reckons that the number of domestic flights - and passengers – will reach pre-COVID-19 levels between now and the New Year.
Less onerous measures
A majority of Indian states have relaxed restrictions on quarantine requirements in recent weeks, thus encouraging more people to travel. “We are noticing a consistent return of demand and better loads in the domestic market,” said Vistara’s spokesperson.
But what of international?
On international routes, the pace of return has been extremely slow, and governments will be looking for a sharp drop in India’s daily COVID-19 cases to restore scheduled flights. As it is, the country’s infection rates are dropping, as is evident from recent days.
Vistara is operating five weekly flights connecting Delhi and London on its Boeing 787-9 Dreamliner under a ‘bubble’ agreement between India and UK. (Under air bubble agreements between countries, special passenger flights can be operated by their airlines for repatriation purposes.)
“Due to the pandemic, the operational capacity continues to remain regulated by the government,” said the Vistara spokesperson. “We are operating at more than 50 per cent of our pre-COVID-19 capacity and plan to further scale it up to 60 per cent in coming weeks.”
Vistara added that it was planning the operations in a way that its entire fleet gets utilized and continues to be “fully functional”.
Vistara is joined by budget carrier Spicejet, which plans to start non-stop flights to London Heathrow from Delhi and Mumbai, starting December 4.
But gloom persists
Industry forecasts suggest there will not be an end-of-year bonanza awaiting airlines anywhere. Passenger load factor - a measure of how well an airline is filling available seats – are well below breakeven on international and domestic flights, according to IATA (International Air Travel Association).
Now could be the time for the Indian government to free up some funds to come to the airlines’ rescue. Any delays could be fatal for some of them.