After the pandemic, India placed limits on air fares and passenger capacity, a move that has not gone down well with airlines. Image Credit: Gulf News Archives

Dubai: Capacity and pricing restrictions are hurting the recovery of Indian airlines, according to Willie Walsh, IATA’s (International Air Transport Association) Director-General.

“India’s domestic market is highly regulated at the moment with government policies. Both capacity and pricing restrictions is slowing down the recovery,” said Walsh, during a media briefing. “Without those restrictions, I have no doubt that the domestic position in India would be significantly helped.”

After the pandemic, India placed limits on air fares and passenger capacity, a move that has not gone down well with airlines. Although India recently allowed airlines operating domestic routes to run at 65 per cent capacity (up from 50 per cent) – some like Indigo, the country’s largest carrier, have been pushing hard to make it a 100 per cent.

IATA also announced passenger demand performance for June showing a very slight improvement in both international and domestic air travel markets. “Demand remains significantly below pre-COVID-19 levels owing to international travel restrictions,” said the industry body.

Total demand for air travel in June (measured in revenue passenger kilometers or RPKs) was down 60.1 per cent compared to the previous year. That was a small improvement over the 62.9 per cent decline recorded in May this year versus May 2019.

International passenger demand in June was 80.9 per cent below June last year, an improvement from the 85.4 per cent decline recorded in May versus two years ago. All regions with the exception of Asia-Pacific contributed to the slightly higher demand.

Total domestic demand was down 22.4 per cent versus pre-crisis levels, a slight gain over the 23.7 per cent decline recorded in May versus the 2019 period. IATA said the performance across key domestic markets was “mixed” with Russia reporting robust expansion while China returned to negative territory.

“We are seeing movement in the right direction, particularly in some key domestic markets. But the situation for international travel is nowhere near where we need to be,” said Walsh.

Cargo breaks records

Meanwhile, global air cargo markets for June showed a 9.9 per cent improvement on pre-COVID-19 performance. This pushed first half-year air cargo growth to 8 per cent, its strongest first half performance since 2017.

Global demand for June, measured in cargo tonne-kilometers (CTKs), was up 9.9 per cent compared to June last year.