The proliferate of COVID19 has impacted airlines, airports and their ecosystems.
The biggest sector which contributes $72billion to GDP is likely to shrink significantly, with the first quarter expected to be a ‘virtual washout’, and with 250 of the total 650 aircraft will be just spare in the next 12 months, according to the current situation said CAPA India.
With the abatement in the demand, the airlines are going to look not just to return the aircraft – but with finite success – the carriers will also look to delay delivery of new planes for want of demand in the industry.
“It is to be believed India to return to pre-COVID19 scenario of airlines with an overall fleet of 650aircraft working operationally fully is going to take up to 10-12months from the time restrictions will be lifted, and this may be obstinate. CAPA India said, in its third report since the industry was disrupted due to COVID-19
With most of the chances of becoming the airplanes the surplus as the industry prepares to resume operations once the lockdown is lifted, which could be gradual.
“When it comes to international travel, the graph is going to occur in a staggered manner and may not follow a straight line, ” CAPA India said.
As the firm points out, to recoup the operations is going to be one of onerous exercise, than suspending them.
“When operations are going to resume, airlines will have to announce a schedule, which will require decisions to be made with respect to which routes to launch first and with what level of capacity flights should fly, without knowing until much closer to the date of departure whether demand actually exists. Even it is to be believed at first it will be having less flying, other than the cargo. Reduced passenger traffic may mean stakeholders could set aside more funds for the development of drones and autonomous vehicles to better serve its whole ecosystem.
“It is very much possible, till the time the airlines will have greater clarity on how the demand for travel is recovering, some carriers may decide to operate with very much a skeleton network only, and till that time on the basis, they may be looking to keep most aircraft grounded to conserve cash, ” CAPA India said.
As of now, there is uncertainty on how the lockdown will be phased out. The passenger carrier airlines have begun to make cargo, rise in the number of those reported infected, and makes travel a bleak possibility.
The death toll in India has crossed around, and more than 4,000 have been reported to be infected.
The second quarter is going to be seasonally weaker than the others. Meanwhile the first three months of the financial year 2020 could be seen as a ‘virtual washout’, watching the lockdown and low appetite for travel among fliers, says CAPA India.
“A gradual path towards normality could be expected during Q3 and Q4,” it said.
Considering all the estimates for whole year, the advisory firm said that the traffic of people willing to fly domestically is expected to decline from an estimated 140 million in FY2020 to around 80-90 million in FY2021. “Meanwhile demand in International traffic in FY2021 is expected to take a hit of 30-35 million traffic or possibly less, falling down from approximately 70 million in FY2020,” it said.
With the ongoing uncertainty, investors and shareholders are forecasting traffic to decrease till the next decade and could be looking more to invest in digital and technological advancements.