Category Archives: Aviation

The travel trade community has received a reprieve as a result of urgent meetings initiated by travel trade associations on behalf of their members with Pradeep Kharola, Secretary, Ministry of Civil Aviation, in terms of refunds on air tickets. The respite however due to this intervention is only from two international airlines – Singapore Airlines and Lufthansa Airlines. Both airlines have updated their offer and will now give full refunds as well, in case the customer wants, but there could be a delay due to backlog. Singapore Airlines however has further offered bonus to people who wish to claim their refunds as credits rather than take cash refunds (over and above the value of ticket).

According to a report released by CAPA India, domestic air traffic is expected to drop to 80-90 million passengers in the current fiscal against an estimated 140 million passengers. The delivery of more than 200 planes to Indian carriers are also likely to be deferred by up to two years. International traffic is expected to fall from approximately 70 million in the previous financial year to 35-40 million passengers or maybe even less in the current fiscal. As a result, the majority of the fleet is likely to be surplus to requirement during the first half of the current financial year. While giving the forecast, CAPA India said it is an initial estimate and would be continually revised. A gradual path towards normalcy could be expected towards Q3 and Q4, the aviation consultancy firm said.

An official statement by IATA has said that travel agents can make payment settlements later without penalties, in the wake of the global crisis of COVID-19. The statement read “For travel agents, we’re allowing settlements to be made a bit later, without penalties. While remittance periods have been kept in accordance with BSP Calendars, we are taking a flexible approach and preliminary figures confirm this, showing that default rates in 2020 are a bit below the year-ago period—despite the stresses on the system in 2020.” In addition, recognising the fact that it may be difficult or impossible to get audited financial statements, or arrange a financial guarantee, “IATA is offering to extend deadlines for these statements by up to a month.”

DEX Aviation is now going to represent Alitalia as GSA (General Sales Agent) for India. According to a statement released by DEX Aviation, the company has become the nationwide GSA for the Italian carrier starting 1st April 2020. Lucio Rigo, Country Manager- India, Alitalia, said that they are hoping that things normalise soon and the industry picks up again, so that they would be able to serve Indian passengers again.

According to the latest data provided by International Air Transport Association (IATA), the airline industry could be staring at an estimated $35 billion of ticket refunds. This, clubbed with significant fixed and semi-fixed costs of which many cannot be avoided over a short period of time, can amount to the airline industry using up to $61 billion from its cash reserve in the second quarter (Q2) of 2020. This comes after IATA’s impact assessment released earlier, which showed that the industry was looking at a net loss of $39 billion in Q2 2020.

Hardeep Singh Puri, Minister of State (I/C), Civil Aviation, has said that they will be looking at resuming international flight operations on case-by-case basis once the lockdown period is over after April 15, 2020. They will be looking at which countries these flights are coming from. “The Government direction has been very clear that the lockdown is till April 15, and after that we will be considering the resumption of flights on a case-by-case basis. Even flights that will bring Indians back would not be allowed to come, until the lockdown is lifted.”

As part of India’s fight against COVID-19, the Ministry of Civil Aviation has launched ‘Lifeline Udan’ flights for movement of medical and essential supplies across the country and beyond. Under this initiative, 62 Lifeline Udan flights have been operated during the five day period from 26th to 30th March 2020, transporting over 15.4 tons of essential medical supplies. 45 out of the 62 flights have been operated by Air India and Alliance Air. The carriers involved in Lifeline Udan operations include Air India, Alliance Air, Indian Air Force (IAF) and Pawan Hans. Support is being provided by Airports Authority of India (AAI), AAICLAS (cargo and logistics subsidiary of AAI), AI Airports Services (AIASL), PPP airports and private ground handling entities. Private carriers like IndiGo, Spicejet and Blue Dart are operating medical cargo flights on a commercial basis.

The International Air Transport Association (IATA) has published new analysis showing that airlines may burn through $61 billion of their cash reserves during the second quarter ending 30th June 2020, while posting a quarterly net loss of $39 billion. The analysis is based on the impact assessment released by IATA, under a scenario in which severe travel restrictions last for three months. In this scenario, full-year demand will fall by 38 per cent and full-year passenger revenues drop by $252 billion compared to 2019. The fall in demand would be the deepest in the second quarter, with a 71 per cent drop. Revenues are expected to fall by 68 per cent. This is less than the expected 71 per cent fall in demand due to the continuation of cargo operations, albeit at reduced levels of activity. Variable costs are expected to drop sharply—by some 70 per cent in the second quarter—largely in line with the reduction of an expected 65 per cent cut in second-quarter capacity. The price of jet fuel has also fallen sharply, although we estimate that fuel hedging will limit the benefit to a 31 per cent decline. These changes to revenues and costs result in an estimated net loss of $39 billion in the second quarter.

With the Coronavirus spreading across the globe, the airline industry is severely impacted, and KLM finds strength in the heart-warming messages that they have been receiving from across the globe on social media. In the video shared by KLM, the airline is urging everyone to stay united and strong irrespective of their nationality and support each other. The video is a culmination of KLM’s ‘Blue Spirit’ showcased during difficult times and highlights how they have been pioneers in aiding help to those who need it the most. The airline championed in importing 8,50,000 masks, brought thousands of people back home and provided 150 iPads to patients. With an expansive support team of 850 volunteers, KLM was answering questions of customers across the globe and helping them during this crisis which has gripped the world. KLM urges everyone to take out a moment to express gratitude to everyone in the airline industry who are doing everything they can to help bring back passengers home safely.

According to ICRA estimates, considering the operating expenses of the Indian aviation industry in FY2019 and that 35-42 per cent of their expenses are fixed in nature, it is estimated that the industry will report a net loss of Rs 75-90 crore per day of shutdown of operations. While some airlines have sufficient liquidity and/or financial support from a strong parentage, which will help them tide over this disruption, some airlines, who are already in financial stress, will face serious troubles.