Light at the end of the tunnel?
Cruising Heights|August - September 2021
16 months after India closed down its airspace for international flights, the situation still remains grim with mandatory social distancing norms creating new challenges for all stakeholders, explains AMEYA JOSHI
AMEYA JOSHI

Starting in February of 2020, the Indian government started putting restrictions on flights to specific geographies. The coronavirus pandemic wasn't yet classified as a pandemic and was largely restricted to China and South East Asia. Then all of a sudden, there started cases from other parts of the world and India. By March, international flights were suspended and soon domestic flights too were grounded. Effective midnight of March 24, 2020 entire aviation came to a halt in the country.

Sixteen months since then, international air travel remains suspended. The regulator- Directorate General of Civil Aviation (DGCA) updates the monthly NOTAM with an extension for another month, one at a time. International travel has been restricted to air bubbles - which India has with 27 countries and Vande Bharat Mission (VBM) where mostly the Air India group carries passengers back from countries that are not allowing scheduled commercial flights.

At some point in time, the restrictions had started easing until the newer variants of coronavirus - now named Alpha, Delta and the likes started wave after wave of infections. The closures have been in focus in Asia Pacific while Europe and North America are opening up.

All major operational parameters in the passenger business were negative:

Passenger numbers are expected to plummet to 1.8 billion (60.5 percent down on the 4.5 billion passengers in 2019). This is roughly the same number that the industry carried in 2003.

Passenger revenues are expected to fall to $191 billion, less than a third of the $612 billion earned in 2019. This was largely driven by a 66 percent fall in passenger demand (measured in Revenue Passenger Kilometers/RPK). International markets were hit disproportionately hard with a 75 percent fall in demand. Domestic markets, largely propelled by a recovery in China and Russia, are expected to perform better and end 2020 49 percent below 2019 levels.

Further weakness is demonstrated by passenger yields which are expected to be down 8 percent compared to 2019 and a weak passenger load factor which is expected to be 65.5 percent, down from the 82.5 percent recorded in 2019, a level was last seen in 1993.

Operational parameters for cargo are performing significantly better than for passengers but are still depressed compared to 2019:

Uplift is expected to be 54.2 million tonnes in 2019, down from 61.3 million tonnes in 2019.

Cargo revenues are bucking the trend, increasing to $117.7 billion in 2020 from $102.4 billion in 2019. A 45 percent fall in overall capacity, driven largely by the precipitous fall in passenger demand which took out critical belly capacity for cargo (-24 percent), pushed yields up by 30 percent in 2020.

Uncertainty continues over the return of global travel with global industry body IATA (International Air Transport Association) giving guidelines at various times. It is expected that air travel will return to pre-COVID-19 levels only in 2024. But air travel will be different than what we know right now!

Mask compliance

IATA conducted a passenger survey in June and saw that most air travelers are confident about the safety of air travel and support mask-wearing in the near term. The survey was done in 11 markets around the world. 65 percent of passengers agree that the air on an aircraft is as clean as an operating room while 85 percent believe aircraft are thoroughly cleaned and disinfected.

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