You are here: Home » Economy & Policy » News
Business Standard

Domestic air traffic to fall from 140 mn to 90 mn due to covid-19: CAPA

"The second quarter is historically the weakest period for demand and hence airlines are only likely to limp back into recovery," aviation consultancy CAPA India said on Monday

DGCA | Civil Aviation | civil aviation sector

Press Trust of India  |  Mumbai 

coronavirus, flights, aircrafts, airlines, aviation
Aircrafts roll over runways at the airport in Frankfurt, Germany

Domestic air traffic is expected to drop to 80-90 million passengers in the current fiscal and delivery of more than 200 planes to Indian carriers are likely to be deferred by up to two years, according to a report.

"The combination of COVID-related travel restrictions and an economic downturn is likelyto result in 1Q FY2021 being a virtual washout for the Indian industry.

"The second quarter is historically the weakest period for demand and hence airlines are only likely to limp back into recovery," aviation consultancy India said on Monday.

As a result, said the majority of the fleet is likely to be surplus to requirement during the first half of the current financial year.

In its report titled 'COVID-19 & the State of Indian Aviation Industry,' the aviation consultancy forecast domestic traffic to decline to around 80-90 million this fiscal from an estimated 140 million in FY2020.

International traffic is expected to fall from approximately 70 million in the previous financial year to 35-40 million passengers or may be even less in the current fiscal.

While giving the forecast, India said it is initial estimate and would be continually revised.

Domestic and international flights have been suspended till April15 amid nationwide lockdown to curb spreading of coronavirus infections.

A gradual path towards normalcy could be expected towards Q3 and Q4, CAPA India said.

According to the report,airlines that are offered concessions by lessors would need to take a strategic call on whether they require all of their aircraft.

The holding costs of maintaining a larger fleet may outweigh the concession available.

More than 200 aircraft -- scheduled for delivery over the next couple of years, including56 MAX aircraft -- are likely to be deferred by 1-2 years, it said.

"Starting from the end of April-2020, Indian carriers are initially expected to seek to return up to 100 aircraft to lessors, especially older equipment and those that may be closer to the expiry of their terms.

"The number of returned aircraft will continue to increase significantly up until September-2020, possibly reaching 200-250, or even higher," the report said.

Since aircraft lessors would have limited customers to whom they can remarket returned aircraft, they may be willing to negotiate temporary rental holidays, CAPA India said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, April 06 2020. 17:36 IST