› Effect of COVID19 on the Aviation Sector

By Pankaj Vatsa, Executive Director - Highways, Buildings and Aviation, Management

During a casual conversation, a friend told me after lockdown he is facing sleeping problem...apparently, he lives near airport & was used to noise of international flights and now the silence is taking time to get used to. Nobody ever imagined that these big and beautiful terminals will be bereft of any person and all the aircraft which signifies prosperity and action will be parked on Tarmac for days together. As per the estimate the aviation industry will suffer USD 4 billion loss due to Covid 19 and how many firms will survive this mayhem is anybody’s guess.

The companies which face extinction has different problems to the ones who will survive and now gear up to life post lockdown. Perhaps the world has changed but the question is how much? As per Airport Council International (ACI) report drop in air traffic is expected to be almost 40% which poses challenge to viability of this capital intensive business. Beside it few other problems which need solution is:

 1. Additional layer of checking, social distancing, will lead to longer check in/ boarding time In

2. Food court, shopping restrictions will hit non aeronautical revenues

3. Use of washrooms will be an irritant

4. Seating restrictions in flight will raise fares exponentially

5. Use of air conditioning in aircraft will be a serious health risk

6. Sensitisation of aircraft before commercial operation of flights

 Airports will have to bring in more of technology in airport operations e.g. complete automisation from passenger screening up to boarding. It has been done on Dubai airport and surely can be replicated at least on our Metro airports. (Hongkong airport has already stared screening of airline staff and passenger through a modern equipment which not only sensitise each person also check that any person is not carrying virus on board or in side airport terminals- TV 9 Hindustan news)

Other possible measures are:

  • reduction on fuel Cess, and GST which will also help in offsetting loss due to lower no. of passengers/aircraft
  • Flight operators should remove
    middle seat to reduce laden weight and save on fuel consumption
  • Reduce no. of crew per aircraft as inflight service will not be in use
  • Renegotiate aircraft leasing charges

 Govt. of India is also working on strategy to help the industry which includes softer loans, easy access to funds, privatisation of airports etc. However, I wonder with no clarity on air traffic and players being same of those Adani, GMRs etc struggling with pandemic impact on their power plants, highway concessions etc. will they have the belly to invest? I think it requires lot of thinking particularly on concession agreement before pushing for privatisation. Particularly because under current circumstances you cannot park all the risks on concessionaires. (today PMO has asked MOCA to expedite privatisation of pending non Metro international airports and DIAL-GMR/MIAL-GVK have already requested HMOCA that three months’ revenue sharing with AAI may be deferred or dispensed off, AAI has asked MOCA that it will put AAI on hardship)

 Egis India aviation team has continued to work on its airport expansion projects despite all constraints. Among three projects Lucknow, Trichy & Pune, work is stalled on Pune being in containment zone but on other two reasonable progress is being achieved. Every effort is being done to have a catch up plan in place for the lost time. We also believe that on these airports, we need to relook at the airport systems to prepare them for post Covid-19 world.

 Road is not easy and lot of new thinking has to be brought in to resurrect the industry. Only certainty is business will not be normal for long time to come!