The emergence of the highly contagious Omicron variant of the coronavirus has thrown a spanner in the works for India’s civil aviation and travel sectors, which were starting to rebound from two deadly waves of the pandemic.
The rapid spread of Omicron has led the government to roll back a planned resumption of scheduled international flights from 15 December. A fresh date has not been announced. This has forced carriers to halt their network expansion plans, especially on the international front.
Only special international flights are allowed between India and 33 other nations under bilateral air bubble pacts.
“We had plans to resume a large part of our international network (as compared to pre-covid period) by early next year. However, the spread of the new strain of covid-19 has cast doubt on recovery of international flights, and thus we have scaled back our plans,” a senior official at a Gurugram-based carrier said on condition of anonymity.
“We are hoping that Omicron is not as damaging as the Delta variant and that we don’t see a repeat of the second wave of the pandemic in the country, which could further delay our plans,” the executive said.
Since June, India’s domestic air passenger traffic has continued to recover, with the easing of lockdown curbs following a steady decline in covid-19 cases.
However, aviation and hospitality companies fear a return of travel curbs and weakening of air passenger traffic if the Omicron variant spreads fast, both within and outside India.
“Travel queries, especially on the international front, have declined substantially in the last month or so,” a senior executive with an online travel agency said, requesting anonymity.
“People seem to be hesitant to make plans for international trips or holidays at the moment though domestic tourist destinations are still seeing good demand,” the executive said.
Meanwhile, domestic air traffic growth has slowed in recent weeks after growing fast in the past few months.
The threat of Omicron is, therefore, bad news for airlines as it would further pressure their fragile operating performance and push out measures to reduce debt.
Indian airlines and airports incurred losses to the tune of ₹24,680 crore in the last financial year because of covid-19-related disruptions, according to civil aviation ministry data.
Credit rating agency Icra has forecast that Indian carriers would need additional funding of ₹37,000 crore between 2020-21 and 2022-23 to cover their losses and debt.
The uncertain market scenario has, meanwhile, forced Wadia Group-controlled GoFirst, previously known as GoAir, to defer plans for an initial share sale. The budget airline was earlier slated to launch the ₹3,600 crore offering in December.
“We are guided by the book running lead manager for the IPO. We are following their advice in this matter,” a GoFirst official said, requesting anonymity.
Aviation consultant Capa India recently said it expected strong growth in air passenger traffic demand till December.
“Daily traffic is expected to stabilize at around 350,000 to 375,000 passengers during December to March, occasionally touching 400,000,” Capa India said in its latest Mid-Year Outlook FY2022.
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