Will ‘Covid routes’ be viable for airlines in the new normal?

Among the many things that have changed due to the Covid-19 pandemic in Indian aviation is the addition of off-beat destinations to which Indian carriers flew to bring back stranded Indians. Among these destinations are Moscow, Bishkek, Lebanon and Manila.

Indian carriers also flew to Doha, Dubai, Male and Colombo where they had regular commercial flights before the pandemic struck, to bring back Indians even as the Indian government, like many others across the globe, banned international flights.

Before the Covid-19 outbreak, no Indian carriers were operating to and from Africa and the CIS countries.

However, the new normal meant that, during the pandemic, IndiGo operated over 800 charters to repatriate around 1,50,000 passengers in less than three months. IndiGo operated international flights to West Asian countries, including UAE, Qatar, Saudi Arabia and Kuwait, to South Asian nations like Maldives, Sri Lanka, Singapore, Malaysia, Hong Kong SAR of China and the Philippines besides also flying to Russia and Uzbekistan.

Earlier, in June, SpiceJet announced that it had operated 175 charter flights, including 111 to UAE, to bring back 20,000 Indians.

Most of these destinations were not a part of these airlines’ flight schedules before the pandemic struck though operating flights to these destinations was a good way for the cash-starved airlines to make some money when regular flights were banned.

However, the key question now is, how many of these cities will the private sector airlines consider for launching regular flights when normal international flight operations resume?

Bilateral pacts are key

Nripendra Singh, Industry Principal, Aerospace, Defence & Security Practice, Frost & Sullivan, says that a lot will depend on the bilateral agreements that India has with many of the countries to which the private sector airlines operated repatriation flights as these agreements specify the number of seats, frequency of flights, and destinations to which airlines can fly before they start regular commercial operations.

Singh adds, “My assumption is that it is almost impossible (for airlines to make these routes a part of their regular operations) as everything boils down to air traffic. The operation of bubble flights to certain destinations is a one-off and unlikely to become a regular phenomenon.”

Among the reasons cited for this is lack of onward potential from Africa and GCC countries for airlines to cash in on.

“One wrong route started by an airline can have a significant negative impact on its entire balance sheet,” Singh says, as an airline has to operate for a minimum of six months before discontinuing operations.

Demand, the decisive factor

However, others are not that categorical in rejecting these new destinations. In a recent interview to BusinessLine, Wolfgang Prock-Schauer, Chief Operating Officer, IndiGo, had pointed out that one has to really study the launching of new routes carefully.

“Indians are there all over the world. We had requests coming to bring Indian students back from Moscow. A lot of Central Asian countries and the Philippines also had a lot of stranded Indians. For scheduled operations, one has to look carefully as there must be sustainable demand. But it has been a good experience of new destinations and sometimes you start something and then you realise there is continuous demand. If we realise this, naturally we will open,” Wolfgang had said.

He added that opening new flights will be along the lines of re-establishing the airline’s network in West Asia and South-East Asia when normal international services begin.

Dhruv Shringi, Co-founder and Chief Executive Officer, Yatra.com, agrees with Wolfgang when he says airlines are constantly assessing the viability of operating regular flights on various routes. “As we continue to operate in the new normal, there are possibilities that some of the off-beat/boutique destinations may quickly pick up from a tourism standpoint,” he says, adding, “As flyers become more confident of air travel, we can expect an increase in consumer demand to off-beat destinations as they continue to explore places that are less crowded and non-commercial to avoid any risk.”