The emergence of the highly contagious Omicron version of the coronavirus has worked for India’s civil aviation and travel sectors, which were starting to rebound from two deadly waves of the pandemic.
Omicron’s rapid spread has prompted the government to withdraw the planned resumption of international flights scheduled from 15 December. The new date has not been announced. This has forced carriers to put their network expansion plans on hold, especially on the international front.
Under the bilateral air bubble agreement, only special international flights are allowed between India and 33 other countries.
“Our plan was to restart a large part of our international network (compared to the pre-Covid period) by early next year. However, the spread of the new strain of Covid-19 has cast doubt on the recovery of international flights, and thus we have withdrawn our plans,” said a senior official of a Gurugram-based carrier on the condition of anonymity.
“We are hoping that Omicron is not as harmful as the Delta version and we do not see a recurrence of the second wave of the pandemic in the country, which could further delay our plans,” the executive said.
Since June, India’s domestic air passenger traffic has continued to improve, with the easing of the lockdown following a steady decline in Covid-19 cases.
However, aviation and hospitality companies fear a return of travel restrictions and weakening of air passenger traffic if the Omron variant spreads rapidly both within and outside India.
A senior executive of an online travel agency, requesting anonymity, said, “Travel queries, especially on the international front, have come down significantly in the last one month.”
“People are hesitant to plan international trips or vacations at this point of time, although domestic tourist destinations are still seeing good demand,” the executive said.
Meanwhile, domestic air traffic growth has slowed in recent weeks after rising sharply over the past few months.
Therefore, Omicron’s threat is bad news for airlines as it will put further pressure on their fragile operating performance and lead to debt reduction measures.
Indian airlines and airports incur losses to the tune of 24,680 crore due to disruptions related to Covid-19 in the last financial year, according to data from the Ministry of Civil Aviation.
Credit rating agency Icra has estimated that Indian carriers will need additional funds of Rs. 37,000 crore between 2020-21 and 2022-23 to cover its deficit and debt.
Meanwhile, the uncertain market scenario has forced Wadia Group-controlled GoFirst, formerly known as GoAir, to shelve plans for an initial share sale. Budget airline to be launched first 3,600 crore offer in December.
“We are guided by the book running lead manager for the IPO. We are following his advice in this matter,” said a GoFirst official requesting anonymity.
Aviation consultant Capa India had recently said that it expects strong growth in demand for air passenger traffic by December.
“Daily traffic during December to March is expected to stabilize at around 350,000 to 375,000 passengers, sometimes reaching as high as 400,000,” Capa India said in its latest Mid-Year Outlook FY2022.
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