Civil aviation revenues dip 85%; over 18,000 jobs lost

Revenues of the civil aviation sector dropped by 85 per cent since the lockdown even as the sector lost more than 18,000 jobs.

The Covid-19-induced lockdown had reduced the air traffic to a fraction of what it was before. The regulatory restrictions on flight operations had led to severe curtailment in operations and sub-optimal aircraft utilisation.

As per the ministry of civil aviation data, domestic traffic fell close to 80 per cent from 5.85 crore during March-July 2019 to a mere 1.20 crore in March-July 2020. International traffic too reduced by 87 per cent from 93.45 lakh to 11.55 lakh during the period.

This led to a steep decline in revenues in the June quarter. The aggregate revenue of Indian carriers came down by 85 per cent from Rs 25,517 crore in the June quarter of 2019 to just Rs 3,651 crore during April-June 2020. Air India's revenue fell to Rs 1,531 crore from

Rs 7,066 crore in the same quarter last year.

Aggregate revenues of airport operators too shrunk from Rs 5,745 crore in the June quarter of 2019 to Rs 894 crore in the June quarter of 2020, a drop of 84 per cent.

Reduced revenues saw more than 18,000 employees losing jobs across airlines, airports, ground handling agencies and cargo operators. As many as 5,298 employees of airlines lost jobs by the end of July while 3,246 people at airports, 8,466 people with ground handling agencies and 1,017 employees with cargo operators lost their jobs between March-end and July-end.

"The fall in domestic air travel demand has been much sharper than the capacity cuts imposed for the industry. The pick-up in domestic passenger volume since end-May

2020 has been slow, with traffic increasing by only

6 per cent in July from the previous month. We think volume growth will remain in the single digits over the next few months, as the pandemic continues to spread in India and people forego non-essential travel," says Fitch Ratings.

Covid-19 has also adversely impacted the financials of the Airports Authority of India and it is likely to see losses this fiscal. In order to meet the working capital requirements, the AAI has taken 'fund-based working capital' facility of Rs 1,500 crore. Delhi and Mumbai airports were given a three-months deferral, up to July 15, on monthly fee payment against their annual fee obligation. Bangalore and Hyderabad airports have also been granted deferment of four months from July 1 for payment of concession fee to the central government.