Private airlines to fly low after 20% fall in flight bookings
Travel restrictions put in place by government affect airlines with results likely to reflect in quarterly earnings
With several countries locking themselves down to prevent any further spread of Coronavirus (Covid-19) on their lands, private airlines would once again end up in red, despite aviation fuel being available at nearly a two-decades low price.
“Daily bookings have declined by up to 20 per cent due to the Coronavirus scare and travel restrictions imposed by governments,” said IndiGo, the country’s largest airline by number of tickets sold.
The private airline, whose CEO had called the current time to be the “golden age for the sector” four months ago, expects that the impact of low load factor in flights would be seen in the financial results of this quarter (January-March).
While admitting that aviation was under pressure, Ajay Singh, chairman and managing director, SpiceJet, believes that the pain is temporary. “We have been here before. SpiceJet is far better placed than many others to weather this turbulence,” Mr Singh said, adding that the Indian market has immense potential.
“Number of international visitors to India has come down drastically. I was told that it has come down by 25 to 30 per cent. Because of the quarantine by every country, both inbound and outbound passenger traffic have got severely impacted,” civil aviation joint secretary Usha Padhee said on the sidelines of civil aviation show Wings India 2020.
To boost sales, SpiceJet launched a discount sale offering one-away domestic tickets for `987 and international tickets for `3,699, along with free meals and seats, for the travel period up to till February 28, 2021.
Aviation stocks suffered badly in a global rout in equity markets. The stocks of Interglobe Aviation, the operator of IndiGo airline, lost 11.43 per cent and Spicejet 19.55 per cent. airport companies like GMR Infra and GVK Power & Infra lost nearly 14 per cent and 12 per cent respectively.
Though crude oil price — the main culprit behind several bankruptcies of airlines — is at a two-decade low, an analyst said aviation stocks were battered because of lower anticipated sales and higher dollar-denominated debt servicing.
● WHILE ADMITTING that aviation was under pressure, Ajay Singh, chairman and managing director, SpiceJet, believes that the pain is temporary.