New Delhi: The Centre’s decision to suspend all visas to India till April 15, barring those given to government officials due to the outbreak of coronavirus is expected to truncate airlines’ international operations.
According to industry insiders, several airlines have already reduced international operations to China and Southeast Asia, further truncation is expected in the coming days.
“The decision taken by the government today (Wednesday) will have a far reaching impact on the industry,” a senior airline official told IANS on the condition of anonymity.
“Currently, passenger load factors are already very low on many international routes, coupled with suspension of visas will leave no passengers to board these flights.”
Most airlines that IANS approached said they will take a call on whether or not to operate services on several international routes in the coming days.
However, airlines might not fully suspend international flights due to existing global aviation regulators that govern the use of airport slots.
At present, the rules governing the use the airport slots provide that airlines must operate at least 80 per cent of their allocated slots under normal circumstances.
However, in exceptional circumstances, regulators can relax this requirement.
Around 43 per cent of all passengers depart from over 200 slots coordinated airports worldwide.
According to Aloke Bajpai, CO-founder & CEO, ixigo: “This is a bold but a necessary move to prevent a mass pandemic in India. This will have a major impact beyond just aviation and the hospitality sector.”
“Indian carriers will be forced to continue to cancel or temporarily suspended international flights for the time being. FTA growth which saw the slowest growth in 4 years in the first half of calendar 2019, will be severely hit this year as well in lieu of the global economic slowdown.”
Meanwhile, airline major IndiGo on Wednesday said that it expects quarterly earnings to be materially impacted due to the outbreak of Coronavirus.
Additionally, the airline pointed out that rupee has also depreciated sharply which will have an adverse impact on its dollar denominated liabilities primarily on account of capitalised operating leases.
The development comes after a Group of Ministers (GoM) on the decided that all Visas to India will be suspended till April 15.
Furthermore, the World Health Organisation declared Coronavirus as a pandemic.
In fact, India will not be the only country whose airlines have truncated international operations.
On Wednesday, Lufthansa Group said that due to the exceptional circumstances caused by the spread of the coronavirus it will reduce flight schedules of its passenger airlines for the period from 29 March to 24 April.
“The flight cancellations will be implemented successively in the booking systems, and affected passengers will be informed of the changes and rebooking options as of today. For all passenger airlines in the Group, a total of 23,000 flights must be cancelled,” the airline said in a statement.
“Further cancellations are expected in the coming weeks. Flight schedule adjustments for the period after 25 April will be made at a later date.”
As per reports, Gulf country Kuwait has decided to suspend all flights from Friday. It has also declared a public holiday from March 12 to March 26.
Earlier, global industry body International Air Transport Association (IATS) has estimated the combined revenue loss for airlines in the range of $63-113 billion.
In its latest financial impact of novel Coronavirus (COVID-19) on airline sector released on March 5, IATA predicted 2020 global revenue losses for the passenger business of $63 billion considering infection is contained in countries with over 100 cases as of March 2.
This scenario considers markets with more than 100 confirmed COVID-19 cases and experiencing a sharp downturn followed by a V-shaped recovery profile.
In case the virus spreads further covering more markets, the losses could almost double to $113 billion thus further affecting the financial health of airlines worldwide.
The projected loss is on account of passenger traffic and does not include cargo operations.