A common working procedure related to passenger quarantine and testing requirement that is followed by all Indian states will help revive airline demand amidst a pandemic that has muted travel aspirations of people, Sanjay Kumar, chief strategy and revenue officer at the country’s largest domestic airline IndiGo said on Wednesday in an industry webinar.
Speaking at a webinar on the aviation sector, Kumar said that this could be in place during the next three to four weeks.
“The inconsistencies about different rules and regulations followed by state governments are keeping passengers away,” he said, adding that airlines could operate at upto 45% capacity as regulated by the government after such a common protocol is implemented.
Indian airlines resumed domestic operations from 25 May, after being grounded for two months during a nationwide lockdown to contain the covid-19 pandemic. The government set a 33% cap on the capacity while allowing airlines to restart operations, which was increased to 45% during June.
However, most airlines are currently operating up to a third of their capacity due to a soft demand.
Kumar said that despite the immediate demand situation remaining weak, long term air travel demand in India remains intact.
SpiceJet chairman and managing director Ajay Singh, speaking at the webinar, reiterated the need for structural changes to the aviation sector that could be brought about by the government.
“We must use this crisis to get structural reforms done, like getting ATF (aviation turbine fuel) under GST (Goods and Services Tax),” adding that the government through its policies should also help Indian airlines get equitable share of international traffic, which is skewed towards international carriers.
“It’s time that Delhi, Mumbai and Bangalore became international hubs,” Singh added.
Indian airlines, excluding market leader IndiGo, will need to raise upto $3.5 billion to survive the grounding due to the lockdown imposed to contain covid-19 pandemic, aviation consultancy firm CAPA India said in a report last week.
“Since the resumption of domestic operations on 25 May 2020, demand has been weaker than expected, with the industry achieving a load factor of around just 55% in Q1 (April-June 2020), and that too whilst limited to 30% of capacity,” the CAPA report said adding that the outlook remains soft with the number of infection cases rising, and due to inconsistent state-wise quarantine requirements.