Covid-19: Capa India says second wave could lead to collapse of aviation sector

By Livemint

The ongoing second wave of coronavirus infections, which has brought the country’s healthcare system to its knees, could precipitate a collapse of the domestic aviation sector, aviation consultancy firm Capa India said in a report on Monday.

This will also accelerate consolidation in the industry resulting in two to three airlines operating in the domestic sector, down from six major airlines and three regional carriers that currently operate in the space, it added.

“Most Indian airlines were already very vulnerable prior to covid, with weak balance sheets and poor liquidity. Covid inflicted massive losses and an increasing debt burden on carriers that were structurally ill-equipped to absorb this impact,” said the report titled ‘Key Trends in Indian Aviation in FY2022: Impact of Second Wave.’

“The extent of the challenge is reflected in the fact that Indian carriers under-recovered almost $70 per passenger in FY21,” it added.

As things stand, fewer Indians took to the skies given the fresh surge in covid cases across the country for the sixth week in a row for the week ending on 1 May.

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