Global airlines fly into an airpocket

Ashwini Phadnis New Delhi | Updated on March 17, 2020

Big 3 West Asian carriers, in particular, may take huge hit

The government’s decision to ban flyers from the UK, Turkey, France, Germany, Spain, Italy, Switzerland and a host of other European countries late on Monday till at least the end of this month will have a major impact on international airlines. During the course of the day, the government also banned flyers coming from Afghanistan, the Philippines and Malaysia with immediate effect till March 31.

The biggest impact of the ban will be felt by Emirates, Etihad and Qatar Airways, commonly known as the big three West Asian carriers, and AirAsia Berhard. These three carriers fly Indians to and from their host countries as a large number of labourers from India go there for work. Now, the Indian authorities have extended the 14-day quarantine for people transiting and coming from the UAE, Qatar, Oman and Kuwait. This means that point-to-point traffic that these airlines carried from India will take a big hit.

The bigger impact, however, will come from these airlines’ home bases which act as hubs for traffic from India to the other parts of the world and back. These three carriers brought in passengers from other parts of the world into India from their hubs in Dubai, Abu Dhabi and Doha.

The three airlines — which a few years ago were blamed by other international airlines of cartelisation as they were weaning away traffic with competitive fares and more connectivity — had a large chunk of the international market. A bulk of this traffic is to and from India to destinations across the globe.

For instance, Dubai-based Emirates operates 172 weekly flights to and from India. If you include flydubai, the hybrid low-cost arm of Emirates, the number of weekly flights goes up even more as flydubai connects smaller towns like Lucknow and Kochi to Dubai and onwards. Ditto for Etihad, which operates 159 weekly flights between Abu Dhabi and 10 Indian cities. The flag carrier of the UAE recently said India was its biggest market outside the UAE. Now, with that gone, one can only imagine the financial mess the airline will find itself in.

Meanwhile, flydubai has also announced that following a directive from the Indian authorities, its flights to and from India will be cancelled between March 17 and 31.

Other international airlines, too, will have to face the brunt of the ban. The government’s order banning passengers from the UK, Turkey, France, Germany, Spain, Italy, Switzerland and a host of other countries in Europe will also affect European carriers like British Airways, Virgin, Lufthansa, Air France and our own Air India, as they too will not be able to get passengers from these countries.

The government’s decision came on a day when CAPA warned that unless there was some help from governments, the global airline industry will be in serious trouble. A report said that by the end of May 2020, most airlines in the world will be bankrupt. It suggested coordinated government and industry action now if this catastrophe is to be avoided.

Published on March 17, 2020

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