The financial woes of the Indian airlines have only increased in the current year. Due to the pandemic and temporary shutdown of airline activities in the country last year, airlines had to face a consolidated loss of $4.1 billion. This year would not be an exception for the industry since CAPA, an aviation consultancy and research firm has said that Indian airlines are going to incur around the same amount of loss in FY2021-22 as well. This is because of the low-passenger traffic and restrictions in flying imposed by the government.
Passenger Traffic Expected to be Better than Last Year
For the airline industry, the passenger traffic is expected to be better than last year. The domestic passenger traffic last year was recorded between 52.5 million. However, this year the numbers are expected to fall between 80-95 million.
While this number might look sweeter than previous year’s stats, the industry still hasn’t come near the 140 million passenger volume recorded in 2019. As per a PTI report, the loss for the Indian airline industry is expected to be doubled to $8 billion this year.
CAPA has estimated this number without factoring in the possible effects of the third wave of COVID-19. If there are further restrictions put on air travel and more cities go into lowdown because of the third wave of the COVID-19 in India, the airline industry will be looking at an even bigger loss.
The loss will be divided almost equally between the full-service carriers and the budget carriers. The full-service carriers are expected to incur a consolidated loss of $2.1 billion while the budget carriers are expected to incur a loss of $2 billion.
June is the month where some levels of recovery is expected for the airlines. The airline industry is already cash strapped and needs a lot of help from the government. However, the hands of the governments are also tied because of the increasing need for surface-level support to poor people during the pandemic. The second half of the FY2021-22 should see a good recovery if there is no third wave of the COVID-19.
