Covid-19 impact: DGCA bars airlines from new bookings until further clarity

Under Aircraft Act, 1934, the government has emergency power to make rules to safeguard national security and public health

The Directorate General of Civil Aviation (DGCA) on Sunday prevented all airlines from taking bookings till a final decision on lifting or easing restrictions on resuming air travel is announced. “It is brought to the notice of all concerned that no decision to commence flights on May 4 has been taken. All airlines are directed to refrain from booking tickets,” the DGCA order said.

A formal ban on forward bookings from the aviation regulator came after a tweet from Civil Aviation Minister Hardeep Singh Puri. It was only government-owned Air India which closed bookings after the minister’s tweet, while private airline executives said it was mere “advisory” and not a “binding order”.

On Sunday, Union Minister Prakash Javadekar made it clear that the central government has so far not taken any decision on starting train or airline services for passengers, asserting that any discussion on the issue is futile.

The move by the regulator, airline executives say will dry up the last possible source of revenue for Indian airlines for whom the cost is increasing with every day of flight ban. India is the only country in the world with a large domestic market which has banned air transport.

Industry executives say the prolonged lockdown is pushing airlines with weak balance sheets towards bankruptcy.

Wadia Group-owned GoAir has sent 90 per cent of its employees on leave without pay for the entire period of lockdown, while its peer SpiceJet is offering its crew leave without pay of three months.

According to a research by brokerage house Ambit Capital, except market leader IndiGo, no other Indian carrier has the liquidity required to survive a lockdown of more than one month. The research didn’t take any government financial help into projection.

In its order, the regulator also clarified that sufficient time will be given to airlines before restarting operations, so that they are able to do bookings for those flights.

“This was one big issue raised by airlines that a closure of bookings cannot happen if enough time is not given to open sale. We have addressed this issue,” a DGCA official said.

Airline executives say that by industry standards, a minimum of 15 days advance notice should be given, so that they can successfully put their inventory on sale.  “It’s impossible to restart operations without sufficient time for bookings,” SpiceJet promoter Ajay Sigh recently said.

Government officials said the opening of bookings by airlines was unfair as carriers weren’t refunding money on flights cancelled due to the lockdown and instead transferring it to a credit shell. This raised massive furore from passengers after which the government on Thursday passed a direction to airlines asking to refund money to travellers who had booked during the lockdown period.

“We wanted to avoid a similar scenario where the lockdown is extended and we are again saddled with cancelled bookings where refund is not being given,” said a government official, indicating there is a high chance that even after May 3, ban on rail and air travel will continue to stay for a longer period