Snail Paced Global Airline Industry

 The airline industry took the hardest blow from the Covid-19 Pandemic. The Year 2020 is supposed
to be the worst year in the airline industry’s history. According to the IATA report, the global airline
industry incurred a net loss of $84.3 billion and international trade saw a decline of 13%.

 The average return fare of the year 2020 is 68% lower than the year 1998, after adjusting the
inflation. The airline industry is one of the major components of any country’s economy and
expectations for air cargo have also turned negative first time since 2009.

 The airline industry’s negative growth reflected in the tourism industry as global tourism declined by
57% approximately (UNWTO). As per the report published by IATA, the employment sector related
to the airline industry is estimated to decline by up to 45% as compared to 2019.

 The airline industry is facing challenges related to cash burn due to the fall in the revenue of the
industry and the growth looks weak as per the trends of domestic flights being at an all-time low.

 India resumed airline operations on 25th May 2020. The Indian airline industry was operating at a
limited capacity and later allowed to operate at 33% in July, 45% in August, and 60% in September
of its pre-covid capacity.

 The Indian airline industry is set to start operating at 75% of its pre-covid capacity on domestic
routes. The number of daily air passengers is set to rise to 200,000 by October-end, while pre-covid
figures of 300,000 passengers per day will be reached between Diwali and New Year.
 Union civil aviation minister Hardeep Singh Puri informed about the “Air Bubble Arrangement”
with 16 Countries - USA, Canada, France, Germany, UK, Maldives, UAE, Qatar, Afghanistan,
Bahrain, Japan, Nigeria, Kenya, Iraq, Bhutan, and Oman - while it is in discussions with Italy,
Bangladesh, Kazakhstan, Ukraine, and others for similar arrangements. This travel corridor will help
the people of two nations to fly either way without restrictions.

 Air Bubble Arrangement is a temporary travel corridor to restart the passenger airline services
between two countries when the regular international flights are not in operation. The two countries
get mutual benefits from this arrangement.

 This travel corridor will help the people of two nations to fly either way without restrictions and this
will be continued till March-April of 2021 or until there’s a vaccine for Covid-19.

 Vistara Airlines had made temporary changes to its policies to cope up with the pandemic situation.
The company decided to provide 200 ml water bottles instead of serving water to the passengers and
withdrew services like serving Starbucks coffee, Turkish towels, welcome drinks, beverages, and
magazines.

 Air Asia needs to raise capital because the future seems bleak for the company after the covid crisis.
It tried to minimize the cost by reducing its workforce by 7.5%. Recently, the Air Asia group is
seeking to raise $600 million by the end of 2020 to remain stable in these tough times.

 IATA estimated that global air traffic will be down by 66% and the Asia Pacific region has been
worst hit by the covid-19 pandemic. The situation of the global airline industry may not see major
changes in 2020, even after the policy changes by different airline companies and governments.

References: https://www.iata.org/en/iata-repository/publications/economic-reports/airline-industry-
economic-performance-june-2020-report/

https://www.iata.org/en/iata-repository/publications/economic-reports/slow-expansion-of-air-travel-
in-july/

https://www.unwto.org/impact-assessment-of-the-covid-19-outbreak-on-international-tourism

https://www.livemint.com/news/india/govt-to-soon-allow-airlines-to-operate-at-75-capacity-on-
domestic-routes-11602150576963.html

https://www.flightglobal.com/strategy/airasia-group-seeks-to-raise-up-to-600-million-by-end-of-
2020/140073.article