Airline capacity restrictions are off; Will there be more flights?

Why were capacity restrictions imposed?

Airlines resumed domestic operations on 25 May 2020 after being closed for two months during the nationwide lockdown. As Covid infections were still high, airlines were allowed to fly only a third of their pre-Covid flights. In subsequent months this limit was gradually increased to 45%, then to 60% and finally to 80% by December. However, the cap was re-adjusted to 50% of their pre-Covid capacity in May 2021 amid a second wave of infections. The current announcement has come about due to the fall in covid infections, which is a relief for the industry due to the increase in demand.

Has domestic air traffic demand improved?

Domestic air traffic has been increasing every month since May-end/early June this year or the second wave of the pandemic. According to the latest data from the Directorate General of Civil Aviation, around 6.7 million passengers took off in the skies in August compared to 5.01 million in July. According to rating agency Icra Ltd, domestic air passenger traffic grew 74% year-on-year and 3% sequentially to 6.9 million in September. Most airlines are now optimistic. He expects domestic traffic to return to pre-Covid levels by or before the end of the current financial year.

How are air traffic fares expected in 2021?

According to data from aviation consultancy Capa India, domestic air passenger traffic is expected to grow by 52% in this financial year, while international passenger traffic is expected to grow by 60%. However, before the outbreak of Covid-19, air passenger traffic is expected to remain well below the figures recorded in 2019-20, the report said.

What does the October issue say?

ICICI Securities said the average number of daily fliers during the week ended October 9 was 262,000, up from 240,000 in the previous week. The number of daily commuters touched 30,000 on October 9, which is about 75% of the pre-Covid levels. Departures rose to 2,225 from last week’s 2,080. According to aviation website Network Thought, domestic air traffic recorded the highest figures in a 15-day period since air travel resumed last year, at just over 4 million fliers between October 1 and 15.

How will the lifting of restrictions affect Ops?

Airlines are expected to increase their capacity during the ongoing festive season in December and beyond, as more Indians are expected to take to the skies. Interestingly, most of the trips in the domestic segment are VFR travel-visiting friends and relatives. Corporate travel is yet to return to its pre-Covid levels. But the fare cap still continues, though its rollover period has been reduced to 15 days from 30 days earlier. Removal of fare cap will lead to a rapid revival, as India is a highly price sensitive market.