The COVID-19 pandemic had a massive effect on the Indian aviation sector in 2020 and main airlines dealing with losses and difficult times laid off staff despatched them on leave without pay, or minimize their salaries. The government also had to extend the deadline for submitting bids for Air India 5 times during the yr. When the pandemic began spreading throughout the nation, all scheduled International & Domestic flights have been suspended from March 23 and March 25, respectively. Scheduled domestic flights have been restarted in a restricted manner from May 25.
The impact of this disruption may be gauged by the loss figures of India’s two largest airlines. IndiGo incurred net losses of Rs 2,884 crore and Rs 1,194 crore in Q1 and Q2 of this fiscal respectively. SpiceJet posted net losses of Rs 600 crore and Rs 112 crore in Q1 and Q2, respectively. The government, in the meantime, permitted particular international passenger flights under Vande Bharat Mission since May an air bubble arrangements have been formed with around 24 international locations since July. However, scheduled international flights stay suspended in India.
“The revival of abroad journey is predicted to be slower and more challenging than domestic. It will hurt Air India particularly as around 60 percent of its income was earlier generated from international operations,” stated aviation consultancy firm CAPA in October. It estimated that just 50-60 million passengers — 40-50 million domestic and fewer than 10 million international — would travel in 2020-21.
In 2019-20, roughly 205 million air passengers — 140 million domestic and 65 million international — traveled in India. CAPA India projected in October that the Indian aviation industry will lose a mixed USD 6-6.5 billion in FY21, of which airlines will account for USD 4-4.5 billion. Because of this, the government’s plan to sell Air India has been hit. After it’s unsuccessful try to sell the national carrier in 2018, the government in January restarted the divestment course of but the pandemic forced it to increase the date for submission of expression of interest (EOI) 5 times.
The last date of EOI submission was December 14. The government has obtained a number of EOIs and it’ll announce the title of certified bidders by January 5. With the intention to make debt-laden Air India extra attractive, the government modified the bidding parameter in October – bidders will now quote enterprise worth as an alternative of equity value. This means that the bidder will be capable of quoting how much cash it would give and how much debt the airline will be capable of carrying. Nonetheless, the government made it clear that a minimal 15 percent of the bid quantity needs to be in cash whereas the remaining could be the debt component.
Air India’s debt was Rs 58,255 crore as of March 31, 2019. Later in 2019, Rs 29,464 crore of this debt was transferred from Air India to a government-owned special purpose vehicle called  Air India Assets Holding Company Limited (AIAHL). Whereas Air India was unable to get a private proprietor in 2020, bankrupt airline Jet Airways has found one. A consortium of UAE-based businessman Murari Lal Jalan and London’s Kalrock Capital won the bid on October 17 to revive Jet Airways. It expects to begin working the airline by the summer season of 2021.
The consortium stated it’s awaiting the NCLT and different regulatory approvals, together with the reinstatement of slots and bilateral visitors rights by the civil aviation ministry and Directorate General of Civil Aviation (DGCA). Slots — which is the time zone at which a flight can land at the airport — as well as bilateral traffic rights — the number of flights an airline can fly to a different nation’s city — are valuable commodities within the aviation sector.
When Jet Airways went bankrupt in April 2019, its slots and rights have been temporarily given to other Indian carriers by the government in order that they will begin new flights and fill the supply gap. Now, as different airlines have added planes and began flights considering these slots and rights will stay with them, it’s not clear what choice the government will tackle this matter in 2021. In the meantime, the process to build the second international airport in Delhi moved ahead in 2020.
Ten months after winning the bid for the greenfield international airport in Jewar, Zurich Airport International signed a concession settlement with the Uttar Pradesh government on October 7, 2020, to start its development. The Swiss developer has chosen a four-company consortium to design its passenger terminal. The first part of the construction of the airport is more likely to be accomplished by 2024. Air cargo visitors in India have been showing a sooner recovery in 2020 in comparison with passenger visitors. This has given some respite to the aviation sector.
However, Anupama Arora, Vice President and Sector Head, ICRA Ratings, stated, “In FY2021, whole cargo volumes are anticipated to decline by 17-20% in FY2021 with significant recovery in cargo volumes anticipated only in FY2022.” To survive the pandemic-induced crisis, all airlines took cost-cutting measures like firings or pay cuts in 2020. In April, GoAir sent the majority of its staff to leave without pay. Air India had in April minimize the salaries of its staff by 10 percent.
At a similar time, SpiceJet and IndiGo minimize the salaries of all staff by 10-30 percent and 5-25 percent, respectively. In July, IndiGo also laid off 10 percent of its workforce. AirAsia India in April has minimized the salaries of its senior staff by as much as 20 percent. Beginning April, Vistara applied for a leave without pay program for its staff based mostly on seniority.
Presently, the Indian airlines are working for domestic flights at around 80 percent of their pre-COVID levels. The domestic services are expected to achieve their pre-COVID levels by March 2021. With the anti-coronavirus vaccination more likely to start from 2021, the Indian aviation sector is hoping for a much better yr as in comparison with 2020. However, after a new and extra infectious coronavirus strain emerged within the UK recently, India announced on December 21 that all passenger flights connecting that nation will be suspended from December 23 to December 31.
