For the second time in a month, aviation consultancy Centre for Asia Pacific Aviation (CAPA) - India, on Monday reiterated that the Indian aviation industry needs an immediate plan to deal with the ongoing financial crisis and warned that the sector is headed for a “challenging future” owing to the restrictions imposed by the government.

In a series of tweets, CAPA- India said, “Indian aviation is headed for a very challenging future given the regulatory constraints imposed on the sector 1) domestic capacity limited to 45% 2) fare bands extended for three months 3) int’l travel restricted to a handful of travel bubbles. The situation is exacerbated by the fact that demand is very weak. Load factors are just 50-55% even with limited operations. And all this is happening at a time when most carriers have no cash and raising capital is very challenging. The viability of Indian aviation will be critical to support India’s economic recovery post-COVID.”

Kapil Kaul, chief executive officer (CEO) of CAPA-India, said, “Aviation is at a breaking point. We need a clear strategy to deal with this crisis.”

The consultancy recently predicted that two Indian airlines would have to shut down in the coming months, owing to the crisis created by the Covid-19 pandemic.

Flight operations in India were suspended on March 25 after the nationwide lockdown was imposed. While the international sector continues to remain suspended, domestic flights resumed operations in a restricted manner from May 25.

According to aviation regulator Directorate General of Civil Aviation (DGCA), the domestic air traffic dropped by 83.5% in June in the wake of the Covid-19 pandemic.

A recent DGCA report revealed that Air India, AirAsia India, Vistara and GoAir, which are among the top airline companies in India, witnessed a passenger count of 2.9 lakh, 1.62 lakh, 1.3 lakh and 89,000, respectively in June.

An industry expert, who did not wish to be named, said, “If the government does not come up with ways to offer financial help to the airlines, the industry will not be able to rise in the coming years.”

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