Tuesday, September 28, 2021

Second surge extremely unfavourable for Indian aviation: CAPA

by Sayan Chatterjee @sayanyde

In CAPA’s study report titled ‘Key Trends in Indian Aviation in FY2022, the leading aviation consulting, research, analytics and transaction advisory practice body hinted that as an impact of the second surge of covid has inflicted massive losses and have also increased debt burden on carriers those were organizationally ill-equipped to absorb the situational impact.

The second surge is expected to accelerate consolidation in the aviation industry resulting in two to three airlines operating in the domestic sector the aviation think tank has expressed in its report.

The report further stated, “The extent of the challenge is reflected in the fact that Indian carriers under-recovered almost$70 per passenger in FY21” It is evident, that we Indians hardly took to the skies given the fresh surge in covid cases across the country for the sixth week in a row for the week ending on 1st of May.

Average passenger load factor (PLF), an airline industry metric that measures how much of an airline’s passenger carrying capacity is used, stood at about 50% during the week ending on 1 May, the report added.

In entirety, the overall aviation industry is fear to counter serious losses in FY22, similar in scale to FY21, with a serious downside risk in the event of a protracted second wave, or the emergence of third wave, the report said, adding that many Indian airlines will struggle to recover from two consecutive years of such massive business impacts.

IndiGo will be the only Indian carrier to emerge from this crisis significantly stronger relative to the other contenders, largely due to its very strong balance sheet, the report further added.

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