Rediff.com  » Business » With coronavirus going strong, aviation cos feel the heat

With coronavirus going strong, aviation cos feel the heat

By Arindam Majumder and Aneesh Phadnis
February 29, 2020 09:20 IST
Get Rediff News into your Inbox:

Reduction in fuel price was supposed to bring back good luck for Indian airlines.  But with the global spread of coronavirus, airlines are being forced to rejig their network, cut flights, and delay launches.

For Tata-Singapore Airlines joint venture Vistara, the deployment of the first Boeing 787 Dreamliner is a milestone in its journey.

Medium and long-haul international flights mark the second phase of growth for the airline, which has faced severe challenges from low-cost airlines in the domestic market.

But Vistara finds itself cornered as Japan, the airline’s long-planned maiden destination with Dreamliner, is increasingly feeling the coronavirus heat.

Industry executives say that with Japan declaring a state of emergency, bookings may be hit for the carrier though the route launch is more than a month away.

“It seems a little worrying but by April or May with the sun coming out in full force, I think the situation will improve,” an airline executive said.

 

Vistara cancelled 20 flights between Delhi and Bangkok and eight between Delhi and Singapore in March. It will also cancel 26 flights between Mumbai and Singapore.

Reduction in fuel price was supposed to bring back good luck for Indian airlines.  But with the global spread of coronavirus, airlines are being forced to rejig their network, cut flights, and delay launches.

Adding to the worry is a slowdown in the number of tourists coming to India with multiple countries issuing advisories for their citizens after the communal riots in Delhi. International passenger traffic growth in the Indian aviation industry could see an impact of 19.5 to 23.8 per cent, Kinjal Shah, vice president, ICRA, said.

“This is negative for the Indian aviation industry, which is already reeling from significant passenger traffic slowdown, with the international traffic growth for the first nine months of fiscal 2020 having witnessed a decline of 8.4 per cent,” Shah noted.

IndiGo, SpiceJet and Air India Express are planning to cut the number of flights to Saudi Arabia and Dammam as West Asian countries have come under the grip of the virus.

Following Saudi Arabia’s ban on religious tours, IndiGo and SpiceJet executives said they were exploring where the capacity from the kingdom can be diverted. Saudi Arabia is the second-largest air travel market for Indians in West Asia after the United Arab Emirates, and around 5.9 million passengers flew between the nations in 2019.

“We may reduce frequencies but will not exit the market completely,” said a SpiceJet executive. The airline, which was supposed to launch Delhi- Ras Al Khaimah flight in the first week of March, is likely to defer it.  An IndiGo executive also pointed out that the airline was likely to cut a flight per day to rationalise capacity. “There are enough places in the domestic routes where the capacity can be redeployed,” he said.

However, a ban by Dammam on fresh labour visa issue and long stay visa is a big worry for the airline management. IndiGo, which is supposed to launch Dammam as a new destination on March 10, will take a call on it depending on the extent of visa ban.

 “Schools are shut for two weeks in March and hence we see a healthy occupancy to Saudi Arabia during that period. We want clarification from the Saudi government on exactly who’s allowed to travel and who’s banned. If this stays for long, it will be a big hit,” an Air India executive said.

The airline has also decided to cut the frequency on Delhi-Seoul route from four daily flights to three.   

On the communal riots in Delhi, an executive working with a low-cost carrier said, “travel is anyway slower in this quarter due to school exams. 
 
"However, with many countries issuing advisory we will also see a dip on tourist inflow which consequently will hit leisure travel in domestic routes”. 
 
The US, France and Russia are among the countries to have issued alert to their citizens on Delhi unrest.  
 
According to data from the Bureau of Immigration, arrival of overseas tourists in India and the country’s foreign exchange earnings from them grew at the slowest pace in a decade in 2019.
 
Photograph: Matt Mills McKnight/Reuters.
Get Rediff News delivered into your Inbox.
Arindam Majumder and Aneesh Phadnis in New Delhi / Mumbai
Source: source
SHARE THIS STORY