Covid-19 fallout: Airbus, Boeing results show turbulent times for aviation

Given the nationwide lockdown and weak travel sentiment, global aviation consultancy CAPA revised downwards estimates for India's air traffic for the for FY21 from 80 to 90 million to 55-70 million

The skies are far from clear for the Indian aviation sector as the Covid-19 pandemic continues to withhold airlines such as IndiGo and SpiceJet from flying. A recent government suggestion to begin operation between green zones has been shot down by the airlines, calling it commercially unviable. Amid this, US-based aircraft manufacturer Boeing has now said that air travel could take at least 3 years to recover to 2019 levels.

“Fundamental growth drivers remain intact but it will take 2-3 years for air travel to return to 2019 levels and a few more years to return to long-term growth trends,” Dave Calhoun, chief executive officer of Boeing recently said.

According to rating agency Crisil, the aviation industry will crash-land this fiscal with a revenue loss of Rs 24,000–25,000 crore with airlines contributing more than 70 per cent of the losses, or nearly Rs 17,000 crore.

“What’s worse, the losses will climb if travel restrictions last longer in hubs such as Mumbai, Delhi, Chennai and Kolkata. We expect the aviation sector will take at least 6-8 quarters to reach pre-pandemic levels,” it said in a recent report.

Given the nationwide lockdown – in place at least till May 17 -- and weak travel sentiment, global aviation consultancy CAPA, too, recently revised downwards estimates for India’s air traffic for the current financial year from 80 to 90 million domestic passengers to just 55-70 million, while international traffic could decline from 35-40 million to 20-27 million.

Crisil expects the Covid-19-led slowdown to reverse the growth trend of 11 per cent annum the industry has logged over the past ten years. Domestic air travel in the month of March declined 33 per cent month-on-month (MoM) to 7.76 million passengers from 11.59 million passengers in February, 2020, data provided by Directorate General for Civil Aviation (DGCA) shows.