India's aviation sector is slowly recovering from the turbulence caused by the COVID-19 pandemic. With infection rate falling, vaccination picking up and countries opening up borders to foreign travellers, air passenger traffic is starting to rebound.
A big jump was seen on October 17 with single-day domestic traffic crossing 3.27 lakh passengers, which is 82 percent of pre-COVID levels.
On the international front, travel companies say bookings for November to December are double of what was seen in October. Traffic is improving even though experts say it is a long way to go to reach pre-COVID levels.
The road to recovery is likely to be long as India's airlines posted cumulative losses exceeding Rs 16,000 crore for FY21.
Aviation Minister Jyotiraditya Scindia called it an interesting and important time in the history of civil aviation across the world, specifically in India.
The pandemic has completely devastated the way life has been for people across the world. However, that being said the fact that India has weathered the storm and in fact, bounced back so strongly and credibly, Scindia told CNBC-TV18.
“I don’t think that any other sector across the industry has been hit as hard as the civil aviation industry. The financial losses of airlines globally have been close to a staggering figure of $370 billion. In India alone, last year losses have been close to $2.7 billion, almost Rs 19,000 crore, But I think, that also it provides an inflection point for the industry to be able to go back to the drawing board reposition itself and bring about a paradigm shift in its value proposition and also the way it functions,” the Aviation Minister said.
Earlier this month the government handed over the national carrier Air India back to its founders, the Tatas for a deal worth Rs 18,000 crore.
Talking about democratising air travel in India, Scindia said, “the government's role is to be a constructive collaborator rather than a restrictive regulator. I think that is the role that this ministry has undertaken under the leadership of Prime Minister Narendra Modi over the last seven years.”
On one hand, infrastructure increased from 75 airports that were built in the last 70 years of India's democracy to 62 airports at last count, including Kushinagar, being built in the seven years of the current Modi government, the minister said.
He pointed to the to growing from 75 airports, heliports and waterdromes to close to 136 airports, teleports and waterdrome’s in a span of seven years.
Scindia also stressed the need to have level playing field and break down of all the gatekeepers to allow the proliferation of players to come in, not just ones but also existing players that will augment capacity.
He said, once normalization happens, he looks at expanding the capacity in the space, which is not only for domestic travel, domestic traffic and domestic carriage but also for international carriage.
Scindia added that he looks forward to domestic airlines purchasing and leasing many more wide-body aircraft so that they can also travel abroad. These long-haul flights will shorten the gap between the revenue per available seat-kilometre (RASK) and the cost per available seat-kilometre (CASK), and the cost structure and the revenue structure of airlines.
The government has identified 25 airports as part of the national monetisation plan and hopes to unlock a value of more than Rs 20,000 crore by roping in private players.
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On airport monetisation plan, Scindia said, “This is not a privatisation plan, this is probably the most well thought out process of gaining leverage out of your current asset base, and making sure that you plant the seeds of future growth without compromising your current asset base. So, the last six airports, which have been put out in the pipeline, are a lease structure. It is not privatization, it is not a disinvestment process. It is a 50-year lease and in that lease structure, there is some money that is given upfront, there is some money that is going to be an annuity based on a passenger.” Then, at the end of 50 years, that asset base reverts back to the government, the minister explained.
He also talked about flights being allowed to operate at full capacity from October 18 onwards. “We hope that happens soon on the international front that is not something that is governed by the civil aviation ministry alone. It is something that is governed by the Ministry of Health and also governed by other countries internationally,” Scindia said.
Watch the accompanying video for more.
(Edited by : Kanishka Sarkar)
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