Editorial: Sigh of relief
The decision to resume international flights will bring cheer to the sector but is not enough to bail out the struggling industry
Finally, the struggling airline industry can heave a sigh of relief with India deciding to resume the scheduled commercial international passenger services from March 27. The last two years of the pandemic have been very tough on the aviation sector. International flights, suspended since March 23, 2020, were to resume in December last year but the spread of the Omicron variant stalled the process. They were to start again from March 15 but Russia-Ukraine delayed the process. The country’s airlines and airports incurred an estimated loss of Rs 19,564 crore and Rs 5,116 crore, respectively, in 2020-21 due to severe disruptions caused by the pandemic-induced restrictions. And, nearly 8,000 lost jobs in the aviation sector. Rising jet fuel prices is expected to add to the burden and prevent the airlines from breaking even or reporting profits anytime soon. Currently, the international flights operating are either under air-bubble arrangements, in place with 88 countries or charters. In most air bubble arrangements only fully vaccinated people are allowed, along with a negative RT-PCR test report. The resumption of full-scale commercial operations comes in the wake of steadily declining Covid-19 cases across the country, with less than 4,000 new cases being reported daily. Added to this, there is an increased vaccination coverage across the globe. India itself has administered over 179 crore vaccine doses, with more than 80 crore Indians being fully vaccinated. Though the Centre has taken some steps to strengthen the sector, keeping in view the health safety of the passengers, it is not enough to bail out the struggling industry.
Last year, the government had allowed the airlines to access funds through an emergency credit guarantee loan scheme introduced by the Finance Ministry in the wake of the pandemic. The scheme lets airlines borrow a certain amount from their banks with a government guarantee backing the loan. The Indian aviation industry was able to breathe a little easier in 2021 as domestic flight operations reached their pre-pandemic levels even though international services continued to remain curtailed due to Covid-related travel restrictions. The decision to resume full-scale commercial operations will bring cheer to the industry and provide impetus to the economic recovery. Airlines in India have urged the Civil Aviation Ministry to increase caps on domestic fares, given the sharp rise in prices of aviation turbine fuel over the past two months and expectations that crude oil prices are expected to remain high due to the Russia-Ukraine conflict. The price of oil has surged to its highest level since 2008 after Russia”s invasion of Ukraine, adding to airline costs at a time when carriers have been struggling to recover from a pandemic-related dip in demand. If there is no sudden surge in Covid-19 infections, the aviation sector may be on the verge of a turnaround.
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