If aviation industry authorities and insiders are to be assumed, any impact of the Omicron variant on the business of the domestic airliners will be temporary with traffic exacted after to pre-COVID-19 levels by early 2022.
Can the coming third wave of the coronavirus pandemic and discovery of the Omicron variant negatively impact Indian carriers? Well, the jury is still out with industry insiders telling that domestic agencies are expected to remain mostly unchanged with some impact visible only on international operations that anyway remain postponed.
According to data made possible by the aviation regulator Directorate General of Civil Aviation (DGCA), all tourists carried by domestic airlines from January to October 2021 were over 6.20 crore as against over 4.93 crores in YoY comparison. This meant a growth of 25.88 percent YoY and 70.46 percent MoM, respectively.
After October 18, scheduled carriers have been provided to move up to 100 per cent of their pre-COVID-19 capacity on domestic routes after the government rejected an ability cap imposed on them following the resumption of flights in May 2020 after a two-month countrywide lockdown.
In the backdrop of the improvement, aviation industry analysts and insiders don’t understand the Omicron, flagged as a variant of concern by WHO since its discovery by South African scientists in November, becoming much of an impact.
“As it is but early days,it’s time to wait and watch.
Nevertheless, if there is a significant spike in the number of cases, the maximum impact will be on the international journey. The domestic journey will be changed to a much lesser extent and we don’t see much pullback there. Although there was a curtailment on the number of planes on domestic routes during the first wave, operations continued unabated,” replied Jagannarayan Padmanabhan, training leader & director transportation & logistics, CRISIL Infrastructure Advisory.
It may start to more established controls on air travel
An aviation industry insider, on the condition of anonymity, said, “The domestic aviation business has shown great improvement in the past two quarters. Flight bookings for December and January are looking good and healthy with fares on multiple sectors giving brisk demand. It’s something the entire industry has been waiting for following a rough 18 months.
- If the new exception is determined to be potentially serious, it may start to more established controls on air travel. Still, the government needs to do a careful impact assessment.”
In FY2020-21, amid the coronavirus pandemic, the economic loss to Indian carriers was almost Rs 19,000 crore, while in the case of Indian airports it was almost Rs 3,400 crore, minister of state for civil aviation, VK Singh had told Parliament when the monsoon session in August. Domestic air traveler traffic declined by 0.3 percent in 2019-20 and by 61.7 percent in 2021 due to the pandemic.
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The Omicron threat is looming great at a time if there is much movement in the sector.
In notable growth, in October, the government inked a piece of a purchase deal with the Tata Sons for the sale of the beleaguered national carrier Air India.
There is too much activity in the industry about the launch of the share market bull Rakesh Jhunjhunwala promoted Akasa Air and the revival of Jet Airways. Jet’s shares rose by 5.6 percent on Tuesday amid reports that the airline was in talks with aircraft manufacturers Boeing and Airbus for the buying of almost 100 narrow-body jets.
Meanwhile, the display of airline companies listed on Indian bourses has been a different kit. In the January-December period, shares of InterGlobe Aviation, operator of the country’s highest traveler airline by market share, IndiGo, have gained 10 percent year-to-date, while those of the second-largest player by market share, SpiceJet, were down 23 percent year-to-date.
- CEO of the soon-to-be-launched scheduled regional carrier, IndiaOne Air, Arun Kumar Singh, declared, “Owing to the nationwide vaccination drive and the prevailing healthcare management in the country, not much impact is anticipated domestically. The central government has kept the situation under tight watch.
However, should a third wave of the magnitude of the second wave hit, then domestically the traffic may dip a bit. That told, the domestic journey will likely improve to pre-Covid levels by the first quarter of 2022.”Any turbulence is, therefore, expected to be temporary.
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