5/25/2020 Challenges galore as airlines get set to fly from May 25 - Business News

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India Today Web DeskNew Delhi May 22, 2020 UPDATED: May 22, 2020 14:26 IST

Challenges galore as airlines get set to fly from May 25

While the government's order to resume operations — limited to just one-third of anairline's total flight capacity — has been welcomed by the sector, critical challengeslie ahead for India's aviation companies.

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Domestic airlines have been allowed to resume operations in India from May 25 under a strict set of guidelines.(Photo: Reuters)

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News / Business / Challenges galore as airlines get set to fly from May 25

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5/25/2020 Challenges galore as airlines get set to fly from May 25 - Business News

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T he aviation sector is all set to resume operations in India after the Civil Aviation

Ministry announced reopening domestic airline services in a phased manner in the

country. However, there are several rules that airlines have been asked to follow, both

precautionary as well as in terms of pricing.

While the government's order to resume operations — limited to just one-third of an

airline's total flight capacity — has been welcomed by the sector, critical challenges lie

ahead for India's aviation companies.

Since the lockdown, most airline companies and allied sectors have been completely put

out of action and revenues have steeply declined. There have been large-scale furloughs

and layoffs at airlines.

Read | Delhi-Mumbai flight tickets capped at Rs 10,000: Govt says domestic air fares will

be regulated for 3 months

Many from the sector have asked for a direct relief or an income support scheme to at

least support their employees. But experts say the government only announced long term

support measures for the sector, which are welcome but not a remedy to the immediate

concern.

It may be noted that airlines are resuming operations after almost two months, and some

have failed to pay salaries to their employees — from pilots to cabin crew and other staff

— for over two months.

Some senior Air India pilots, who are a part of airline pilot bodies, penned a letter to the

Civil Aviation Ministry to highlight the bulging wage backlog at the national carrier.

They said they are now reaching a breaking point, saddened by the fact that they are at

the forefront of government’s Covid-19 international rescue operations, but are only

getting “lip-service”.

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Several hurdles await India's cash-strapped aviation sector

Paying wage backlogs of employees and meeting others expenses poses serious challenges

Airlines may see lower revenue for the next three months

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Wage backlog growing:Air India pilots write togovt for urgent �nancialsupport

Atmanirbhar BharatAbhiyan: PM Modiunveils Rs 20 lakh croreeconomic package with…

5/25/2020 Challenges galore as airlines get set to fly from May 25 - Business News

https://www.indiatoday.in/business/story/aviation-sector-airlines-resume-may-25-challenges-employees-wage-backlog-relief-package-1680752-20… 3/8

There are many private airlines where there have been deep pay cuts while some others

have been sent on leave without pay (LWP). Some have kept the damage limited to

delayed salaries.

Airlines are also encountering other charges like maintenance of aeroplanes, even as they

stay grounded in the hangers due to the lockdown.

Also Read | Coronavirus: Travel agencies flag refund hurdle, seek urgent govt aid for

airlines

Moreover, airports also have to pay airport charges. All these are substantial charges,

making it difficult for airlines to generate revenue required to run operations, especially

because there is a cap on their capacity and the price they can charge from passengers.

The aviation ministry has released a detailed list on prices airlines will have to follow for

some time to protect customers’ interest.

Turbulence not over

Ratings agency ICRA’s vice president Kinjal Shah recently told Mail Today that domestic

carriers are approximately losing Rs 75-90 crore per day without any operations and that

their debt level is expected to rise to Rs 46,500 crore by FY22.

The sheer uncertainty pertaining to travel and tourism in the post-coved world may

significantly dent travel over the next few months.

A top executive of an online travel agency told India India Today.in that the aviation sector

needs more direct relief from the government in order to recover from the shock.

Considering the fact that it is a critical sector, many are hoping from some concession

from the government.

In the absence of direct income support, GST relaxation and airport charge reduction, the

sector may not crumble under pressure.

Must Read | Home to airport to destination: Complete step-by-step guide for passengers

on domestic flights

Care Ratings in a recent note questioned the relief measures announced by the

government to support the cash-starved aviation sector. It indicated that the measures

are long term measures and may not help tackle the present crisis.

Story inAudio

Wage backlog growing:Air India pilots write togovt for urgent �nancialsupport

Atmanirbhar BharatAbhiyan: PM Modiunveils Rs 20 lakh croreeconomic package with…