The dangerous surge in new coronavirus cases has turned India into the global pandemic hotspot. What it has also done is reverse the airline industry’s biggest travel comebacks. Carriers in India had reached 87% of their pre-pandemic seat capacity through early April. That progress has now unraveled as the surge in infections led to a pullback in domestic flights.
At the start of this week, capacity had fallen to 71% of 2019 levels, a 16 % drop over 3 weeks. Further eroding demand is a move by nations including Singapore, Australia, the UK and the United Arab Emirates to impose restrictions on visitors from India.
India’s vast domestic network made it one of the world’s fastest-growing countries for aviation before the Covid-19 outbreak. Short-haul carriers such as IndiGo propelled India to the world’s 3rd largest market. And earlier on in the pandemic, India won plaudits for enforcing strict social distancing rules that lowered the infection rate. But now the country’s public health system is being overwhelmed by an aggressive surge in cases, with daily infections exceeding 300,000
As the outbreak overwhelms the nation’s hospitals and crematoriums, an upturn in air travel won’t happen until the latest crisis is contained, said Rob Morris, the head of consultancy at UK aviation advisory firm Cirium.
The Path Ahead
Among major economies, only Thailand and Turkey have seen even bigger setbacks, though neither had made it back as far as India. With airlines still cancelling flights and countries throwing up more barriers, India’s market could plummet to as little as 25% of normal. Reacting to surging cases, Turkey imposed a 3 week lockdown. Thailand, too, could be forced to tighten restrictions on businesses and travel.
The reversal in India highlights how fragile the recovery is and will be in the coming months as incidents like this occur elsewhere. While the industry is going through volatile times, the comeback will be strong again. India’s troubles have already spilled over into connected markets. A surging trade in getaway flights to the Maldives has now faded. The same has happened with non-stop journeys that had been added by US carriers such as United Airlines and American Airlines earlier in the crisis.
What’s happening in India is nothing short of a humanitarian crisis, said Larry Culp, chief executive officer of engine-maker General Electric Co. US airlines have been using the flights to replace a fraction of the international business they’ve lost to the pandemic. At the start of the outbreak last year, India suspended regular international travel rules that would typically see many long-distance passengers routed through connecting hubs such as Doha and Dubai.
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