AirAsia, GoAir eye revenue growth from charter flights amid Covid-19

Charter flights are helping airlines earn cash amid uncertain travel demand and rising fuel costs.

GoAir will be operating an additional 150 charter flights to bring home Indian citizens from West Asia, an airline spokesperson said on Tuesday. Until Monday, GoAir operated 51 charter flights carrying 8951 passengers to India.

An AirAsia India spokesperson said it has a few more domestic charter flights planned over the next few days under its 'Umeed Ki Udaan' initiative to support migrant workers' return to their home. The airline has till now flown 26 charter flights within India and transported 4200 passengers. The highest demand for charters was to East and North East India, the airline said.

Domestic flights resumed on May 25 but seat occupancy is still between 55-60 per cent. Regular international flights are shut till July 31 and stranded Indians are returning home on government organised Vande Bharat flights or private charters.

Airlines are operating over 700 domestic flights every day and number of domestic and foreign charter flights are limited. Yet these flights are lucrative for the airline due to uncertain demand in domestic market.

"We have not been able to estimate demand. Fuel prices are rising in past two months and it makes more sense to deploy aircraft for charters as there is guaranteed traffic and two way income," said an aviation industry executive.

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A charter flight on an Airbus A320 or Boeing 737 aircraft costs around Rs 4.5 - 5 lakh per hour. A customer pays for both legs even if it is one way ferry flight.

"We are looking at ways to generate extra revenue to meet our expenses. We have flown charters for foreign governments and have also helped private executives return home on charter flights," said Simran Singh Tiwana, CEO of Bengalaru based Star Air.

Demand for overseas charters, however, is expected to taper off by July end as India is expected to open regular commercial flights on international routes.

"We have been operating multiple international and domestic charters on a daily basis for over a month now. Many companies have been booking charter flights to transport employees to various work locations both within and outside the country," a SpiceJet spokesperson said.