Air traffic in India is flat. why over here

What do the numbers show?

According to brokerage firm ICICI Securities, the average number of daily domestic passengers in the week ended December 11 stood at 358,000, as against 357,000 in the previous week. This is down from 374,000 in the week ending November 27. The recession comes weeks before the Christmas and New Year holidays, a period in which the number of bookings is usually high. Fears about the Omicron version of the coronavirus are evident among travelers who may postpone travel plans. However, airline executives expect traffic to pick up in the coming weeks.

What does this mean for the travel business?

With the easing of lockdown restrictions following a steady decline in Covid-19 cases following the second wave of the pandemic, domestic air passenger traffic has seen significant growth since June. The emergence of the Omicron variant now threatens to curtail the small gains made by airlines after June. The pace of opening of international flights had increased, but now its speed has also slowed down. Now, if the Omron variant expands rapidly both within and outside India, the aviation and hospitality industries can expect more travel restrictions and weaker air passenger traffic demand, especially on the international front.

How have countries responded so far?

Most countries, including India, have banned international travellers. India has termed many countries as ‘at risk’. These include South Africa, Brazil, Botswana, China and Zimbabwe, as well as the UK and all European countries. Booking searches, especially for international flights, are decreasing week by week.

Has Omicron Affected International Flights?

India withdrew its plan to restart scheduled international flights from December 15, five days after announcing the resumption on December 1. However, special international flights continue to operate between India and 33 other countries under bilateral air bubble agreements. Globally too, countries have imposed several travel restrictions, which have delayed the resumption of scheduled flight operations. International airlines have blamed government-imposed restrictions for the reduction in passenger demand.

What is the outlook for Indian Airlines?

Indian airlines have suffered huge losses in the last few quarters. Together, airlines and airports suffered 24,680 crore during 2020-21 due to Covid-19 disruptions, the Civil Aviation Ministry said. Credit rating agency Icra estimates that Indian airlines will need additional funding of 37,000 crore between 2020-21 and 2022-23 to cover its deficit and debt. Omicron’s threat is bad news because it will put pressure on operating performance and lead to further debt reduction measures.