Economy

Govt’s decision to increase flights is matched by demand: IATA

Our Bureau New Delhi | Updated on November 25, 2020 Published on November 25, 2020

On November 11, the Indian government allowed domestic airlines to operate up to 70 per cent of the flights   -  GP Sampath Kumar

$31.7-billion loss for airlines in the Asia-Pacific region this year

The government’s decision to progressively raise the number of flights that Indian carriers can operate is being matched by demand and the International Air Transport Association (IATA) says it is seeing an increase in numbers.

“I do expect the trend to continue. It is very welcome to be raising the restriction which the authorities have been doing progressively. It is leading to increased passenger traffic and increased flights,” Conrad Clifford, IATA Regional Vice-President, Asia-Pacific, said in a virtual press interaction in response to a question from BusinessLine.

The move comes even as IATA estimates that airlines in the Asia-Pacific region are expected to post a loss of $31.7 billion this year as against a net profit of $4.9 billion that the airlines in the region posted in 2019. In 2021, IATA estimates that the net loss for the airlines in the region will be at $7.5 billion. IATA does not give a country-wide break down or profit or losses for airlines in the region. India is considered a part of the Asia-Pacific region.

Signs of revival

Clifford expressed the hope that the increasing domestic activity by Indian carriers can get back to a cash positive situation possibly more quickly than carriers that do not have a strong domestic market.

On November 11, the Indian government allowed domestic airlines to operate up to 70 per cent of the flights that they had been operating in pre-Covid times. On May 25, when domestic flying restarted after a gap of two months domestic airlines were allowed to operate up to 33 per cent of the flights that they were operating before flights were suspended on March 25 due to the Covid lockdown.

Clifford pointed out that as was made clear at the IATA AGM, airlines are in dire straits financially for a variety of reasons including borders being closed, adding that “it is highly likely that we will see more consolidation (of airlines),” in the region.

The IATA official was of the view the Korea Airlines’ buyout of Asiana airlines was a good example of airlines getting together in a very difficult market to ensure their survival and continuation of jobs and employment for their staff. The buyout was announced on November 16.

Clifford again urged the government to assist not only the airlines and airports but also other aviation stakeholders.

Addressing the media, Vinoop Goel, Regional Director, Airports and External Relations, Asia-Pacific, IATA, said the region had lost anywhere between 30 and 40 per cent of connectivity due to the pandemic irrespective of whether it is measured by city pairs or by other matrices. “This has been fairly uniform across the region,” he said.

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Published on November 25, 2020
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