India has moved to ban all domestic passenger travel with effect from midnight tomorrow. This move comes after India had already banned all international travel last week, for a period of one week. The order does not extend to freight services within the country.
Swift and severe measures
The last few weeks have seen India take increasingly drastic steps to prevent the spread of the pandemic. In recent days, India has suspended all international flights and revoked all visas issued for foreigners. However, the move to suspend all domestic flights is one that has not been taken by even the worst-hit countries, with countries such as Italy still operating limited flights.
This order could potentially cripple the entire aviation industry in India. With no flights in the air, the entire ecosystem will come to a standstill, possibly forcing companies to layoff employees in order to survive. While the government has been negotiating a $1.6bn bailout with airlines, this latest news will likely push that figure up significantly. The next few weeks will be crucial for many airlines and we could even see some collapse in these conditions, making government aid all the more important.
Which airlines will lose the most
While all carriers, barring perhaps Air India, are at risk of collapse, some will be hit harder than others. GoAir and SpiceJet are two particularly vulnerable carriers to this downturn, and ones we’ll be closely watching closely. Airlines like Air India and IndiGo with their fleet of over 120 and 250 aircraft respectively, may have to ground their entire fleets.
Another option airlines may opt for is to operate freight-only flights using passenger aircraft. This has become increasingly popular during the outbreak as a way to transport essential goods and maintain revenues. With domestic routes now canceled, carriers might switch to this option soon if demand allows so. Only two Indian airlines, SpiceJet and Air India, operate cargo aircraft.
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Overall
India’s move is one of the most extreme taken by any country affected by the coronavirus. However, with a large population, the risk for India is exceptionally high. The effect on the Indian aviation industry will be far-reaching, with many airlines clinging for life. The next few weeks will be crucial for the government to bailout Indian airlines, possibly as a part of a multi-billion dollar package for the industry at large.
As more and more countries lock down their borders, the coronavirus pandemic shows no signs of slowing down. Other countries may also follow in India’s footsteps, especially if this move slows down the spread of the virus. We will be closely following this story to see the impact this move will have on airlines and the world.
What do you think? Let us know in the comments.
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