Civil aviation revenues down 85%, 18,000 jobs lost

Pickup in domestic air travel since July has been very slack

Chennai: Revenues in the civil aviation sector have dropped by 85 per cent since the coronavirus lockdown. The sector also shed more than 18,000 jobs during the same period.

The Covid-19 lockdown reduced air traffic to a fraction of what it was prior to the pandemic. Regulatory restrictions on flight operations by domestic and international sectors led to severe curtailment of operations and sub-optimal aircraft utilisation.

As per the data from the Ministry of Civil Aviation, domestic traffic fell close to 80 per cent from 5.85 crore during March-July 2019 to 1.20 crore in March-July 2020. International traffic too reduced 87 per cent from 93.45 lakh to 11.55 lakh during the same period.

This led to a steep decline in revenues in the June quarter. The aggregate revenue of Indian carriers came down by 85 per cent from Rs 25,517 crore in June quarter of last year to Rs 3,651 crore during April-June 2020. Air India’s revenue fell to Rs 1531 crore from Rs 7,066 crore in the same quarter last year.

Aggregate revenues of airport operators too shrunk from Rs 5,745 crore during June quarter of 2019 to Rs 894 crore, a drop of 84 per cent.

Reduced revenues saw more than 18,000 employees losing jobs across airlines, airports, ground handling agencies and cargo operators. As many as 5298 employees of airlines lost jobs by the end of July, 3246 people at airports, 8466 people working with ground handling agencies and 1017 employees of cargo operators lost their jobs between March-end and July-end.

“The fall in domestic air travel demand has been much sharper than the capacity cuts imposed for the industry. The pick-up in domestic passenger volume since end-May 2020 has been slow, with traffic increasing by only 6 per cent in July from the previous month. We think volume growth will remain in the single digits over the next few months, as the pandemic continues to spread in India and people forego non-essential travel,” finds Fitch Ratings.

COVID-19 also has adversely impacted the financials of the Airports Authority of India (AAI), which is likely to see losses this fiscal. In order to meet working capital requirements, AAI has taken fund-based working capital facility of Rs 1500 crore.

The Delhi and Mumbai international airports were given deferral for a period of three months up to July 15, 2020 to make monthly annual fee payment against its annual fee obligation. The Bengaluru and Hyderabad airports have also been granted deferment of four months from July 1, 2020 for payment of concession fee to the Central government.

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