Airlines are seeing an uptick in demand due to a multitude of factors including further relaxation of lockdown rules, the upcoming festive season and the promise of a vaccine, holding a sliver of hope for the sector as resumption of domestic flights in the country turned 100 days on Tuesday.
The government allowed the domestic flights to resume from May 25, exactly two months after they were banned on March 25.
4 lakh unique trips
In August 31, the number of flights conducted in a day was at 91,362, according to a tweet from Minister of State for Civil Aviation Hardeep Puri. He said, “As States further relax their guidelines, numbers are only going to soar.” The figure is 24% of pre-COVID-19 daily passenger traffic of 4 lakh unique trips.
The number suggests a slight increase as compared to June and July when passenger demand was a mere 15% of pre-pandemic levels, according to ixigo’s co-founder Aloke Bajpai.
“Our own data, which reflects advance booking trends, increase in searches and not just daily travel figures, looks even more promising. In another month or so we expect this to go up to 35%-40%. It is quite encouraging that three months after domestic flights were re-opened we have made this much recovery and there is a fairly high chance that by Diwali we will be at 50% of pre-pandemic demand. However, I remain cautiously optimistic as the number of COVID-19 cases continue to rise,” Mr. Bajpai told The Hindu.
He attributes the surge in demand due to increase in travel by the trader community because of reopening of businesses following “unlockown 4” guidelines, college entrance exams such as NEET and JEE and advance bookings for Durga Puja in October and Diwali in November.
“Bookings for upcoming festivals are the best sign of confidence we are witnessing,” he says.
Leisure travel seeing increase
Immediately after flight operations resumed in May end, airlines reported that passenger traffic flow was uni-directional from big cities to smaller towns as many far away from their families tried to return home. Now, the traffic has started to move in the opposite direction as people flock to tier-1 cities and bigger metros to rejoin work, he says. However, travel between big metro cities is yet to resume. Leisure travel to destinations like Goa, Kerala and north-eastern States is seeing a week on week increase.
“Bookings for November, December and beginning of 2021 are picking up faster than what we had expected back in May,” says Nripendra Singh, Industry Principal, Aerospace, Defence and Security Practice at Frost & Sullivan. He attributes this to consumer confidence due to trials for Oxford vaccine and Bharat Biotech vaccine entering advanced stages and the likelihood of their results being known by year end.
Aviation consultancy CAPA’s India CEO Kapil Kaul sounds a note of caution. “Aviation industry has had a deep structural impact and downside risks will continue for the next couple of years. Demand shock is severe and the financial shock is even more severe which means aviation, especially airlines, need funding for next 2-3 years and their recapitalisation requirements are high leading to very low motivation and appetite to invest by the promoters.”
He says the government must offer relief by bringing the ATF under the GST or reducing VAT on it, a robust privatising programme for Air India, AAI and Pawan Hans to “ensure industry is in better shape for the next crisis as the [long term] impact of this crisis is inevitable”.
