The spread of coronavirus has wreaked havoc on daily life, grinding most of our routines and plans to a halt. Schools and universities around the world have cancelled classes, daily flights are being cancelled, professional sports leagues have suspended their seasons, Visas have been suspended. While it’s undoubtedly a smart move for public safety, all these cancellations are taking a huge financial toll. It is no surprise that the impact on the airline industry clobbered the hardest by the COVID-19 aka coronavirus pandemic is the one responsible for helping spread it to the four corners of the Earth. But the speed and depth of the nosedive that the airlines have taken is nevertheless breathtaking.

RESCHEDULING BY AIRLINES

Till last week, airlines were largely affected on the international side but as the coronavirus has even spread in India, large-scale cancellation and rescheduling are beginning to happen even among Indian passengers. The low demand has forced airlines to now relook at their flight schedules in the domestic market as well.

Now all domestic airlines, including government-owned Air India, have announced a quitclaim on re-booking charges in case a passenger does not want to travel on the designated date.

GoAir, which was earlier offering free cancellation, has said that it will now allow people to only reschedule their flights for no charge. It also announced that all bookings made between March 8 and April 30 and for the travel period between March 8 and September 30, can be cancelled if the passengers do not want to travel and do outdoor activities review.
IndiGo offered also to waive off rescheduling charges on tickets booked between March 12 and March 31 for its domestic and international flights.

Other airlines including Air India, Air India Express, SpiceJet and AirAsia too said that they will not charge any fee for rebooking of their flights due to coronavirus.

FLIGHT BOOKINGS ARE DECLINING

The airlines also report a tremendous fall in the number of bookings. Week by week, there is a 15-20% reduction in the bookings as people are afraid to travel to and fro due to the coronavirus outbreak.

VISAS SUSPENDED

India imposed restrains to the country as the World Health Organization (WHO) declared the Covid-19 outbreak a pandemic with more than 245,000 confirmed cases and more than 10,000 deaths in 164 countries. India’s count of infected people is more than 190 with 4 deaths so far from coronavirus. The government late on Wednesday, 18th of March, suspended “all existing visas, except diplomatic, official, UN/international organizations, employment, and project visas” until April 15. The visa-free travel facility for Overseas Citizen of India (OCI) holders has been suspended until the same date.

NO INTERNATIONAL FLIGHTS TO LAND IN INDIA

India has now shut down doors for the landing of international flights in the country. The government has announced that no international flights will land in India from 22nd March to 31st March as a measure to control the spread of coronavirus.

EXPECTED FINANCIAL LOSS

With countries sealing their borders partially or fully across the world due to the novel coronavirus pandemic, the aviation sector has been hit extremely hard as most airlines globally are cancelling. All Indian airlines will report significant losses in the first quarter of this year and may initially ground around 150 planes, and the number is expected to increase as more domestic operations are curtailed over the coming weeks as the shock from the coronavirus pandemic rises.

In addition to this, as per the aviation advisory firm Corrective and preventive action (CAPA), India, all Indian airlines will report significant losses in the first quarter even with oil prices at around USD 30 per barrel. At an industry level, consolidated losses are estimated to be in the range of USD 500-600 million for the quarter (excluding Air India). However, these are very preliminary estimates and are subject to changes.

OUTCOME OF FINANCIAL LOSSES

As a result of coronavirus, flights are getting cancelled and there are hardly and passengers willing to travel which has resulted in a huge loss of the airline industry. IndiGo, yesterday, announced that it will cut the salaries of employees. Ronojoy Dutta, the CEO of IndiGo, will himself take a 25% cut in salary, with other senior vice presidents and above taking a 20% pay cut while vice presidents and cockpit crew taking a 15% pay cut.
Government-owned Air India may also cut the salary of employees by 5% because of its growing financial losses due to the coronavirus pandemic, which has nearly grounded its entire international operations.

GLOBAL IMPACTS ON AIRLINE INDUSTRY BY CORONAVIRUS

Commercial flight and airline cancellations due to coronavirus began in January and were limited primarily to Wuhan, China. But now it has expanded to most of the countries. American Airlines has suspended operations to and from Milan, Italy, from New York (JFK) and Miami (MIA). American, the world’s largest carrier by some measures, has cut international flying by 75 per cent and domestic flights by 30 per cent for April, with deeper cuts expected in May.

In Italy, Ryanair has stopped services to and from Italy from 13th March until 8th April, with BA scrapping its routes until 4 April as the country goes into lockdown. EasyJet has cancelled all of its flights to and from Italy between 10 March and 3 April. It has said it will only operate rescue flights in the coming days.

Due to this coronavirus outbreak, the aviation industry is going to face a tremendous loss in millions and billions.

coronavirus affecting airline industry

ABOUT THE AIRPORTS BECAUSE OF CORONAVIRUS

Coronavirus has also left the busiest airports empty now. Impact of coronavirus on the airline industry and Mumbai’s Chhatrapati Shivaji Maharaj International Airport, which connects India’s financial Centre to the world, is almost empty with silent travellers and empty lounge areas. Bengaluru airport in India’s Silicon Valley has also reported a 50% drop in international travellers.

Temperature screening of every passenger, regular sanitization fumigation of terminals and disinfection of airplanes have been implemented.

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The Airport Health Organization (APHO) is in charge of screening of passengers at the airports. If an individual is suspected or found positive for coronavirus, each airport has a separate room where they can be quarantined. Separate counters have been provided for flyers from affected countries, along with the mandatory use of gloves and masks by the crew.

Airport officials screen for possible cases of the novel coronavirus at Wuhan Tianhe International Airport in Wuhan, China, where the illness originated.
Airport officials screen for possible cases of the novel coronavirus at Wuhan Tianhe International Airport in Wuhan, China, where the illness originated.

THE GOVERNMENT’S PLAN FOR AIRLINE INDUSTRY

Also, for the impact of coronavirus on the airline industry, India is planning a rescue package worth as much as $1.6 billion for the aviation sector, which has been battered after the coronavirus outbreak, forced countries to close borders and brought air travel to a near-halt, as reported by two government sources. The Finance Ministry is considering a proposal that includes the temporary suspension of most taxes levied on the sector, including a suspension of aviation fuel tax. Let’s hope we get through this situation.

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