Covid second wave delays recovery of aviation sector in India

By Tribune India

The Indian aviation will have to wait longer to reach pre-Covid levels of operations as the second wave of Coronavirus threatens to derail the gains made by the sector over the past few months with flyer confidence tanking again resulting in sharp drop in demand in the past couple of weeks.

As per industry estimates, demand for flying dropped by 13 per cent to 246,600 passengers in the last week of March 2021 (v/s the last week of February, 2021—when the peak was recorded), resulting in no month-on-month (MOM) improvement in traffic (still down 37 per cent to pre-Covid levels).

In April, 2021, demand further fell by 5 per cent from the last week’s average of March, 3021 to 233,000 passengers per day, clearly indicating that flying is again getting out of fashion over concerns on the pandemic.

Moreover, the situation is also impacting yields for airlines. As per airfare tracker of Motilal Oswal Financial Services, yields in March increased by 2-5 per cent MoM, but down 13- 14 per cent QoQ in 4QFY21. This is despite the upward revisions in the floor of airfare bands in February, 2021 by 10 per cent and again in March by 5 per cent.

A spike in crude oil prices during 4QFY21 has further added to the negative sentiment, the brokerage said.

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