With coronavirus fear on the verge of scaling up in India, the story could just get grim for India's airline industry, even as internationally, the aviation story, by all prospects, is set to get from bad to worse.
Air India had already cancelled flights to China and Hong Kong last month itself. The spate of cancellations, as well as number of destinations being cancelled, have only been on an upward spiral since then.
All Air India flights to mainland China and Hong Kong remain suspended till end of June, while Indigo has cancelled flights to Guang Zhou and Chengdu from Delhi till June 14. Schedules for this month show that Vistara has cancelled a total of 54 international flights from India—34 to Singapore and 20 to Bangkok. “Vistara will continue to monitor the situation and progressively evaluate the need for any further adjustments,” according to a press note issued by the airline.
Now, the flight cancellation spree seems to be extending westward. Air India is now suspending many flights to Italy, as well as other affected countries like South Korea and Japan. “We are reducing frequency of these flights,” said Air India chairman Rajiv Bansal.
With three positive cases of the Covid-19 virus infection confirmed in India presently (the three previous cases in Kerala have all been declared infection-free and discharged), the fear is whether there would be a spread among the local populace, and if so, how it would affect domestic travel. India's domestic aviation sector, after being one of the fastest growing in the world in the last few years, had gone in for a tumble in 2019 following a slowdown in the economy and bankruptcy of the leading private full-services carrier Jet Airways, back in April last. Domestic growth was just two per cent in January, the month coronavirus struck, and the figures for February and March is expected to be worse.
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Globally, the extent of how this could affect the airline trade can be evident from one simple statistic released by the global flight data provider OAG—China was the world's third biggest aviation market just two months ago, before the outbreak. Just four weeks later in mid-February, it had fallen to 25th position, as scores of airlines within the country and abroad cancelled hundreds of flights to the world's second biggest economy.
While China seems to be recovering—18,200 flights, mostly domestic, have resumed operations by this week— it now seems to be the turn for rest of the world. Milan, Italy's biggest airline hub, has seen a reduction of 25,500 seats earlier this week. This figure is already climbing, with many international airlines, including Delta, RyanAir and others, announcing suspension of flights to Italy in the last 24 hours. OAG estimates a total reduction of four million airline seats over the next two months. This is an estimate that could scale up if situation doesn't stabilise or if more countries come under the grip of Covid-19.
“The airline industry is looking at a very grim (next) six months,” says Atul Todi, CEO and co-founder of 10times, a business event platform. “With cases just appearing in India....(and) with majority of their costs, airlines, flying permits and even employees affected to a great extent, we can expect major stress on their revenue.”
International airline body IATA has warned that the loss for global airliners due to the coronavirus flight suspensions could be around $30 billion. This estimate was before new hot spots like Italy, Iran and South Korea popped up on the horizon this week.