Effects of COVID-19 on the Indian aviation industry

The aviation industry is one of the worst hit sectors from the COVID-19 pandemic. In fact, Lufthansa has already said in a statement that the aviation industry might not be able to sustain the prolonged effect of coronavirus without any aid from the Government. Almost every major airline in the world is using all the methods available, from grounding of aircraft, to ordering pay cuts to employees, yet nothing seems to be helping these airlines. In this article lets have a look at how the Indian aviation sector is trying to combat this epidemic and stay afloat.

IndiGo is India's largest airline by market share. Photo by Andrew Pries │ AeroNewsX

In what is a major blow to the Indian aviation Industry, today (ie. 19-03-2020) the Indian government announced the suspension of all International flights with effect from 22-03-2020 until 29-03-2020. A circular released by the DGCA states: “No scheduled international’s commercial passenger flight will take off from any foreign airport to any airport in India after 0001 hours GMT of March 22, 2020. These instructions remain in force till 0001 hours GMT March 29. A max travel time of 20 hours is permissible for such commercial passenger flights to land in India. As such no incoming scheduled international aircraft shall be allowed to disembark its passengers on Indian soil, foreigner or Indian after 2001 hours GMT of March 22, 2020."

Almost every major Indian airline has already suspended their international operations or have trimmed them down. In a report, CAPA India said that Indian airlines may ground as many as 150 aircraft in order to sustain this epidemic.

IndiGo, which is one of India's largest airlines by market share has followed the footsteps of other global airlines by announcing a pay cut for its senior employees. In a mail sent to its employees, IndiGo CEO, Ronojoy Dutta, said that he has taken a pay cut of 25 % and senior vice-presidents and everyone above will take a pay cut of 20 percent. This change in salary will come into effect from April 1, 2020. He also clarified that this pay cut will not be applicable for band A and B employees. With domestic flights flying almost half empty, Indigo is now forced to ground 16 of its fleet of 260.

Go Air, which has been majorly affected, asked its employees to go on unpaid leave on a rotational basis and has also terminated the contracts of its expat pilots. Go Air is among the Indian airlines suspending all international flights.

"In view of the current situation, Go Air has been forced to terminate the contracts of expat pilots which is in line with the reduced international capacity," a Go Air spokesperson said. Regarding unpaid leave, Go Air said it has “initiated a short term and temporary rotational leave without pay program that will not only help the company counter the short term reduction in capacity, but will also ensure that a cross section of our employees stay away from the workplace to ensure business continuity”.

Vistara, one of the premium airlines in India, followed the suit of Go Air and announced the temporary suspension of its international flights. The airline, which recently received its brand-new Boeing 787-9, is considering delaying the delivery of the rest of its aircraft on order as it tries to stay afloat. SpiceJet has also announced the suspension of international flights.

With situations like this, the Indian government is planning a rescue package worth $1.6 billion for the aviation sector according to the sources. In this, we expect the government to include the temporary suspension of most taxes levied on the sector, including a deferment of aviation fuel tax, etc. With this said we urge all our readers to be safe and healthy and venture outside only if necessary.