The 21-day nationwide lockdown announced on March 25 which has seen all passenger services disallowed till at least April 14 will deliver a major setback to the Indian Aviation business.
Industry think-tank and research agency CAPA (The Centre for Asia Pacific Aviation) has projected India’s aviation market incurring a staggering loss between $3.3 and $3.6 billion in the first quarter of Financial Year 2021 due to the effects of the coronavirus.
“India’s aviation sector could incur losses of $3.3-3.6 billion in 1QGY2021 assuming that all domestic and international operations remain grounded until June 30.” Even with some partial resumption of services in May and June, the financial outcomes may not change significantly,” the agency maintained in a release last week .
“The extension of the domestic lockdown until at least 15-Apr-2020 is the right decision by the Government of India. However, it has ensured that aviation will be seriously impacted by Covid-19. The April-June quarter, traditionally one of the stronger quarters of the year for Indian airlines, is increasingly looking like it will be a washout,” the statement further emphasized.
Of the projected loss, airline companies are likely to bear a hit of $1.75 billion while airports and concessionaires could lose between $1.50 and $1.75 billion.
“The entire sector is now in a state of crisis which will certainly impact FY2021 and quite possibly well beyond,” CAPA’s statement said.