MINOR PROJECT REPORT

ON

“A STUDY ON THE CHALLENGES CONFRONTED BY

INDIAN AVIATION INDUSTRY DUE TO COVID 19 PANDEMIC”

SUBMITTED IN PARTIAL FULFILMENT FOR THE AWARD OF THE DEGREE OF

Bachelor Of Commerce (Honours)

2020-2023

UNDER THE GUIDANCE OF SUBMITTED BY:-

DR. ISHA RAWAL DIVANSHI KHER

(ASSOCIATE PROFESSOR, VIPS) ENROL. NO. - 35617788820

BCOM HONS 2ND SEMESTER

VIVEKANANDA INSTITUTE OF PROFESSIONAL STUDIES

AU Block (Outer Ring Road) Pitampura, New Delhi - 110034

(AFFILIATED TO GGSIPU)

1
 STUDENT’S UNDERTAKING

I, DIVANSHI KHER, Enrolment No. 35617788820 from BCOM 2B of the Vivekananda

Institute of Professional Studies, Delhi hereby declare that the Minor Project Report titled
“A STUDY ON THE CHALLENGES CONFRONTED BY
INDIAN AVIATION INDUSTRY DUE TO COVID 19 PANDEMIC”
is an original work and the same has not been submitted to any other Institute for the
award of any other degree. A presentation of the Minor Project Report was made and the
suggestions as approved by the faculty were duly incorporated.

DATE: 21st July, 2021

SIGNATURE OF THE STUDENT:
DIVANSHI KHER

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 EXECUTIVE SUMMARY

The recent pandemic caused by COVID-19 has globally affected air transport mobility as well as
the airline industry in general. Numerous restrictions have been implemented in airline transport,
which is potentially leading towards severe long-term impacts on the airline industry.

Despite the valuable contributions of scholars to the COVID-19 pandemic, limited scholarly
attention has been paid to the opportunities unleashed by the crisis. As many industries have been
turned upside down and markets rendered uncertain, the crisis is also propelling waves of
innovation activities on the positive side.

The analysis yielded insights on how adversely the Indian aviation industry has been affected and
the innovations inspired by coronavirus including inflight social distancing, utilising touch less
technologies at airports, disinfecting aircraft with UV, open-middle-seat policy, accelerated use of
biometrics in check-in and COVID-19 insurance. The theoretical and practical implications of the
COVID-19-inspired innovations examined.

The main objectives of this study are:

• To study and evaluate the impact of COVID 19 on the Indian aviation industry
• To determine a comparative study of pre and post COVID era
• To know the dynamics of social, economic and political aspects
• To recognise better alternatives to adapt after the impact of COVID 19

In this paper, air transport mobility was analysed regarding India based on the available data from
the relevant sources associated with the airline industry. The goal of the paper is to assess early
economic and enviornmental impact of COVID 19 on the aviation industry as it is one of the
hardest hit industries.

All pandemic outbreaks before followed V-shaped scenario but COVID -19 has paralysed the
society for longer with stricter governmental measures and so U-shaped scenario has to be taken
into account as the most likely outcome for the aviation industry during this pandemic.

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 ACKNOWLEDGEMENT

My first regards are to almighty god it was my trust and belief on him which enable me to embark
upon this task move on the right path and recede the realm of facts. I would like to thank from the
core of my heart to Dr Isha Rawal, faculty VIPS, for providing me the due inputs for the project
assigned on “A STUDY ON THE CHALLENGES CONFRONTED BY
INDIAN AVIATION INDUSTRY DUE TO COVID 19 PANDEMIC”
She has been a constant source of motivation and has channelized my efforts.
I feel privileged in expressing profound sense of gratitude and indebtedness to my guide who has
generously provided the chance to work at the esteemed field of service market. Her guidance and
constant inspiration where instrumental in the completion of this research. She always allowed me
to encroach upon her precious time and ensured her generosity with ideas.

DIVANSHI KHER

35617788820

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 TABLE OF CONTENTS

S. NO. PARTICULARS

1 STUDENT’S UNDERTAKING

2 EXECUTIVE SUMMARY

3 ACKNOWLEDGEMENT

4 CHAPTER 1 : INTRODUCTION

5 CHAPTER 2 : LITERATURE REVIEW

6 CHAPTER 3 : RESEARCH METHODOLOGY

7 CHAPTER 4 : ANALYSIS AND INTERPRETATION

8 CHAPTER 5 : CONCLUSIONS AND RECOMMENDATIONS

9 REFERENCES

5
 CHAPTER - 1
INTRODUCTION

6
THE INDIAN AVIATION INDUSTRY

HISTORY

Civil aviation in India was estimated to be the third-largest commercial air industry in the world by
2020 but because of economic slowdown and the the global pandemic, it is currently the seventh
largest civil aviation market in the world and third largest in terms domestic operations. It is dated
back to 1911 when the first civil aviation trade flight in Allahabad started from a polo field carrying
courier to NAIN via the Yamuna.

Air India is India’s national carrier and plays a significant role in linking India to the rest of the
world. By 1938, the airline was renamed to Tata Airlines and was flying domestic flights to a
number of destinations. J.R.D Tata was himself heavily involved in the airline, he flew the airline’s
inaugural flight in 1932 and was India’s first licensed pilot. Tata Airways also played a role in the
Second World War, carrying troops and supplies for Britain during the war.
Therefore, J.R.D. TATA was called the FATHER OF CIVIL AVIATION IN INDIA.

Some of the leading private companies in the sector include Indigo, Spice jet, Air India, Go Air, Air
Asia and Vistara. These airlines are serving more than 80 cities in India. Also, even running foreign
travel routes after the liberalisation of Indian aviation.
By 1996, India repealed all laws regulating the formation of airlines and allowed the introduction of
scheduled private airlines. This deregulation allowed for the formation of new airlines such as JET
AIRWAYS and MODILUFT. This laid the groundwork for the current Indian aviation industry.

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GROWTH

Indian aviation sector is growing at an accelerating rate and the country is getting the benefits of its
improved connectivity. Since its inception the sector has seen many changes. The vast geographical
coverage of the country and its industrial growth makes the aviation sector more meaningful.

The rising working group and economic improvement of Indian middle class is also expected to
boost the growth of the sector further. As a result of this growing demand the Government of India
is planning to increase the number of airports to 250 by 2030. This improvement in infrastructure
has happened to be as a result of improved business and leisure travel. The major requirement of the
aviation sector is development of ground infrastructure.

Indian aviation sector has a long history and moved from private sectors to government sector then
again in the hand of both government and private sectors. With every passing year, the sector
witnessed significant improvement in the movement of traffic in both the passenger and cargo
segment.

The 2000s marked the beginning of India’s aviation boom. Full-service carriers such as Air India
and Jet Airways were challenged by a slew of low-cost airlines. Low-cost airlines drastically
reduced fares, allowing millions more to fly and challenging the larger airlines.

Notable examples of low-cost airlines were IndiGo, SpiceJet, GoAir, and AirAsia India. These
airlines now occupy over 70% of the domestic market and continue growing. This explosion of
airlines and low fares has propelled India into the third-largest aviation market, requiring thousands
of new aircraft in the coming decades.
The growth of the Indian aviation market has also attracted a number of foreign airlines. Carriers
such as Emirates and Qatar have become major long-haul carriers, flying to nearly a dozen cities
each and holding a significant share of the market.

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EFFECT OF GLOBALISATION

The Indian aviation industry took a step ahead after 2003, the new aviation policy was allowed to
become synchronised with the economic prosperity of India. Praful Patel was appointed as the new
aviation minister who completely revamped the out-dated policies. During his tenure, the policies
were deregulated and soon, India along with China became an attractive spot for global air travel.
Till today, India is performing well in the international aviation sector.

India opened its skies to international airlines and till today, the number of air carriers has tripled. In
addition to that, intense rivalry inside the aviation sector has boosted global aircraft leasing business
in the country too.
Local people have also started to use domestic airlines for travelling within the country because
they have become more efficient, their lifestyles have been upgraded and they value time. In
people’s view,
globalisation has taken over the entire world let alone India. It has positively impacted the aviation
industry in India by increasing its usage rate and popularity. Globalisation has branded the country
by enhancing its tourism and improving the overall economy.

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IMPACT OF COVID - 19

We are in the middle of a global Covid-19 pandemic, which is inflicting two kinds of shocks on
countries: a health shock and an economic shock. Given the nature of the disease which is highly
contagious, the ways to contain the spread include policy actions such as imposition of social
distancing, self-isolation at home, closure of institutions, and public facilities, restrictions on
mobility and even lock-down of an entire country.

Today, we see the impact of COVID -19 is having gradual effects like major economic depression
comparable with the Financial crisis of 2007-08. Countries hit by such a novel virus, do experience
a drop in overall economic activities. The contraction of the economy would begin with the
diminishing of the travel and tourism sectors that hit all the airlines around the globe. Nevertheless,
the pandemic has spiral effects on the national and global economy and it would be very ambivalent
to estimate the actual damage caused by the pandemic.

In economic terms, any economic shock to one country is quickly spread to other countries through
the increased trade and financial linkages associated with globalisation. All these predictions
directly transfer to the aviation industry as airlines across the world had grounded aircrafts as
passenger number collapsed and governments had closed down the borders and international travel.

Aviation is arguably one of the safest modes of transport in the world per number of people
transported as stated by the International Civil Aviation Organisation (ICAO).

Air transport mobility during the current COVID-19 outbreak has strongly affected India as well as
other parts of the world. A large number of countries had closed their borders, or imposed severe
travel regulations, which reduced airline movement globally by over 40%. India had completely
shut its travel during the first phase and partially in the second.

10
Also, there are a significant number of countries worldwide that have completely closed their
borders for airline transportation, while in other cases, some countries have denied entry into the
country for specific nationalities. Overall, movement is drastically reduced and the global situation
is far from being usual. Passengers are either forbidden to travel or discouraged in doing so due to
the restrictions in the arriving countries that request quarantine. Due to the previous reasons,
travelling is currently mostly limited to business travel in these pandemic circumstances.
Later, recently, the government has made compulsory for international travellers to and from India
to be fully vaccinated before travelling.

Many governments worldwide had started to ease up the restrictions on socialising of people and
are starting to open the shops, restaurants, hotels and social spaces such as gyms, libraries or events
in phases. These would be a great impact on the local economy and would stimulate the demand for
products and services which would, in turn, lead to diminishing negative impact of the predicted
recession. However, governments will ease up travel restrictions last and it could increase the
negative impact on airlines. Also, many people would be scare to take a flight as the spread of
germs and viruses is higher in closed environments where people stay for hours such as planes.

Two main elements are driving this change:

1. Travel restrictions – As mentioned above, travel restrictions have the greatest impact on air
travel. Further travel restrictions will deepen the impact of the recession on demand for
travel and the most severe impact is expected to hit second quarter (Q2) 2020, which are
months April to June. Depending on the scenario of V-shaped or U-shaped path, we can see
the quicker or slower recovery when the governments will lift up severe travel restrictions
which are hampering the demand. Domestic markets for air travel can be in the first stage of
lifting travel restrictions and can lead to an upturn in demand starting in the Q3.

2. Overall economic development – The economic shock of COVID-19 was projected to be

most severe in Q2 2020 when GDP was expected to fall by 6%. By comparison, during the
financial crisis in 2009, the global GDP shrunk by (only) 1.1%. However, the impact of
reduced economic activity in Q2 alone is likely to result in an 8% fall in passenger demand
in the third quarter (Q3) according to IATA.

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 CHALLENGES CONFRONTED BY THE
INDIAN AVIATION INDUSTRY DUE TO COVID 19

As with any major crisis, COVID-19 and its economic ramifications have presented both challenges
and opportunities. Let’s briefly examine five key challenges that the aviation industry faces as it
strives to recover from its precipitous fall.

• Rationalisation of corporate travel - Even as markets recover, the increasing

adoption of technology and work-from-home routines are likely to reduce demand for
business travel significantly. The need to conserve cash and reduce costs in the long run will
reinforce such behaviours as businesses struggle to restore profitability and value for
shareholders. Airlines and airports will have to contend with this new normal, innovate and
alter their growth strategies accordingly.

• Drop in commercial revenues - The need for social distancing and personal hygiene
while travelling has already hurt passenger spends within terminals significantly.
Commercial or non-aeronautical revenues are a rich source of income in airports businesses,
more than 50 per cent of overall revenues in many mature airports, a large proportion
generated by duty-free retail, which has completely dried up with limited or absent
international footfalls. Job losses, rationalisation of salaries, reduced economic growth and
lower disposable incomes are likely to exacerbate the impact in the future reducing footfalls
and spends both at airports and in-flight. Airport owners will need to transform their
commercial business and operating models to deal with this new reality but will be helped
by advances in technology and the growing popularity of digital platforms.

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• Market distortions – Airlines have suffered heavy losses in revenue from the
pandemic, threatening the survival of many, especially given the nature of the business (high
capital expenditure and with long paybacks). Financially solvent governments (U.S.,
Germany, Singapore, U.A.E., Japan among others) have stepped in to provide relief to many
national carriers through grants, soft loans, credit guarantees and other forms of support.
Private carriers have not been equal beneficiaries in such markets with minimal or no
support at all from regulators or governments potentially jeopardising competitive tension
and aggravating market distortions that can impact both choice and fares for flyers in the
future.

• Impact on future investments and asset rebalancing - High growth

markets like India have created capacity to meet consistently growing demand for air travel
over the last two decades. In some airports, capacity has either been built upfront or being
created with significant costs already incurred. While the long-term outlook for growth
remains strong in yield air markets like India, the next three to four years are going to pose
significant challenges for airport owners and investors to monetise assets or repurpose them
to create shareholder value.

• The one - two for regulators - A combination of factors, such as weak demand
outlook, poor revenues, high asset servicing costs and low liquidity, appears to have caught
regulators across the world in a perfect storm. Compensating airports on current business
models without imposing an additional pricing burden on airports’ principal users- airlines,
passengers, commercial businesses - presents a major conundrum for regulators. In some
cases, they also must make difficult decisions in fairly and equitably reallocating airport
assets such as slots and real estate.

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AVIATION IN POST PANDEMIC WORLD

The impact of COVID-19 on the aviation sector has been severe but it has also provided an
opportunity for the industry to reimagine its future. Here are five ways in which it could be done.

• Refocus on the cost-line - Innovations in design, technology and financing can

significantly change the cost of providing services for both airlines and airports. It can help
deliver a better environment and cushion the pressure on both affordability and profitability.
Solar powered airports, electric bussing, green buildings and recycling can engender
significant savings in operating costs and could become the norm for the best performing
airports.

• Conservative use of technology - In a progressively digital world, bytes carry more

value than bricks if used well. Investing in the right tools and technology can not only help
monetise assets better but also significantly improve operating efficiency and customer
experience.

• Transformation of the operating model - Technology can facilitate a complete

revamp of the operating model for greenfield assets. For example, touch less check-ins,
RFID bag-tags, contactless and paper-less immigration and boarding processes can largely
obviate the need for large passenger concourses and check-in areas. Sustainability is a
collateral theme that can enhance asset productivity and unlock value by effectively
managing life-cycle costs. Another important consideration would be to find the right
balance between resilience and efficiency.

• Collaborate - Airlines and airports have often been adversaries in a commercial

ecosystem but may have a lot to gain from each other in a demand-constrained, price-
sensitive market. Sharing data could be the key to maximising value and sharing gains from
mutual benefits. It could not only help extend the clientele beyond airport boundaries but
also help optimise costs while providing more value for passengers and airport users.

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 • Innovation - History has shown us that crisis have often spawned the best inventions and
innovations. The immense value of data and technology that we have access to today cannot
be overstated. They act as perfect levers to invent and innovate solutions that can boldly take
on a world shaped by volatility, uncertainty, complexity and uncertainty.

RECOVERY: U-SHAPED VS V-SHAPED PATH SCENARIO

Currently, the overall severity and duration of the Covid-19 pandemic are still uncertain with many
variables constantly changing daily. However, there are two indicative scenarios which are
indicators of likely paths or consequential outcomes out of many other variable paths. One has to
take into account that the actual path of the recovery will eventually depend on factors such as
availability of government assistance, general economic conditions, consumer’s confidence and the
most importantly duration and magnitude of the outbreak and successful containment measures
which could bring faster recovery for the airline industry.

The ICAO has been scenario building and two out of many possible scenarios came up as the most
relevant, so-called U-shaped path and V-shaped path.

These two scenarios are developed to explore the potential short-term economic implications of the
Covid-19 pandemic.

V - SHAPED PATH

V-shaped scenario is a normal shape for a recession, with a quick drop and a brief period of
contraction followed by smooth recovery and positive growth. Previous local pandemics had a V-
shaped impact on aviation and were back to normal within 6 to 7 months of the outbreak. The most
significant pandemic to date to hit the aviation industry was SARS COVID 19.

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U - SHAPED PATH

U-shaped path scenario is accounting for a prolonged period of contraction with silent recovery and
the possibility of not returning to trend line growth for a long period of time. Scenarios are
predominantly differentiated in terms of demand and supply conditions. Demand condition is the
degree of consumer confidence in air travel that can be translated into demand or so- called load
factor, whereas supply conditions are mainly the timing and scale of airline capacity decline and
recovery There would still be a weak demand return. The U-shaped scenario indicates very slow
recovery and progression of capacity to 40% of baseline level with limited, almost non-existent
demand growth. Baseline level embodies the originally-planned, pre-pandemic trend line growth.

MEASURES TAKEN BY THE INDUSTRY TO OVERCOME DAILY

CHALLENGES

• HYGIENE
The current health crisis has underscored the need for the highest degree of hygiene within aircraft
cabins. When the virus took hold, airlines quickly dropped their tight turnaround time, which saw
little cleaning, and opted for thorough aircraft cleaning methods instead.
Since COVID-19 could spread through surface contact, disinfecting every touchpoint after a flight
is critical. Common areas such as lavatories and overhead bins are given particular emphasis during
cleaning.
Most airlines around the world are cleaning planes between flights, no matter how short the journey.
On longer routes, some airlines are also deep cleaning their planes, especially if an infected
passenger is found to have traveled. Planes are likely the cleanest they have ever been during this
pandemic thanks to these new changes.
While this may not seem that significant, airlines had actually stopped cleaning planes, or only
doing the bare minimum, prior to the crisis. It was not uncommon to find some crumbs or remnants
of the last flight after a quick turnaround. However, all of this has changed with the new COVID-19
cleaning practices, a positive step for the industry.

16
This new emphasis on hygiene extends not only to aircraft but to the passengers themselves as well.
Airlines universally require face masks to be worn throughout flights and some carriers even give
airlines a hygiene kit (the 2020 version of an amenity kit) containing the essentials, such as hand
sanitiser and wipes. Face shields have also appeared with some airlines, including Indigo, Vistara,
Air India, etc.
Since the highest odds of getting COVID-19 is from another person, everything must be done to cut
down the risk on full flights.

• SEATING CRITERIA

No one particularly enjoys the middle seat and, during the pandemic, blocking it out has made many
feel safer. While blocking the middle seat does give passengers more space and a feeling of safety,
the jury is still out on how much it mitigates virus risk.

Most airlines have been wary of putting in place any such policy which leaves 33% of seats on a
flight empty. Blocking the middle seat is financially difficult and only works if demand is low (and
those seats weren’t going to be sold anyway) or if passengers are willing to pay a premium for it.
However, Vistara, Indigo, and Spice Jet are all currently blocking the middle seats.
Airlines are hoping the blocked seats will actively push passengers to book flights with them over
competitors.
Of all the COVID-19 policies put in place, the middle seat ones are the likeliest to exit first. A
number of carriers have already started booking planes to capacity to maximise revenue. While
middle seats will fill up once again, the change has spurred seat innovations in economy to look
forward too.

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• MEAL SERVICES

The in flight hot meal services have been completely stopped after the Covid 19 pandemic so as to
minimise the risk of spreading the virus. Later, recently, only packed food or ready to eat food is
being served and been catered to. Passengers arena allowed to carry their own food items or
eatables, hence reducing the exposure and contact between the cabin crew and passengers.

• SOCIAL DISTANCING
This is one such practice that is being followed at all places all the time. Social distancing is the
new and a very highly preventive measure to stop the spread of COVID 19. During flights and as
well as at the airports, social distancing is mandatory, be it check in, seating, arrival, etc , this
practice is being followed very well.

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SCOPE OF THE STUDY

Today the aviation industry is a byword in Indian society and it has become an integral part of our
day-to-day life. Indian aviation sector percentage is getting higher as more and more people are able
to access and fly hence, having better living standards. Though this pandemic has adversely hit this
sector, but the changes being made in day to day life of flying, it is certain that it will revive as the
pre Covid era. With the help of this study , one can get to know about the reality and challenges
faced by the Indian aviation industry. This study will help to know more about the opinion of the
travellers about the obstacles and the respective changes made.

PURPOSE OF THE STUDY

Much research has been done on how the Covid 19 pandemic has made ripple effects on the
economy and the country. The intent of this study, however, is to understand how the challenges are
now being confronted by the Indian aviation sector. The analysis showed that private and public
companies both have been able to improve the level of service they can provide to their customers
with the new norms and regulations. In particular, airlines have improved the availability of
hygienic surroundings, reduced common contact practices, following social distancing, lowered
costs of services, and has effectively raised customer satisfaction and the level of service that
customers expect to receive specially after the hit of Covid 19. Now, the most essential obligation of
each airport and airline is to provide the passengers with clean and hassle free travel. Practical
implications – The research revealed, and a primary survey that many people still feel agitated to
travel as the rate of spreading of the virus is higher in enclosed areas such as aircrafts.

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 CHAPTER - 2
LITERATURE REVIEW

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Airline industry has been one of the fastest growing industry globally in terms of demand as well as
capacity (Lee 2019). Over the past century, commercial aviation has been observed as integral part
of economic prosperity, stimulating trade, cultivating tourism development. Its relative affordability
in recent years has inculcated it in people’s lifestyles (O’Connell 2018). Aviation sectors economic
contribution (direct, indirect, induced and tourism concomitant) in Global GDP is estimated as USD
2.7 trillion (ATAG 2018).

Notwithstanding the growth in demand as well as capacity, the sectors has always been financially
challenging struggling with thin margins (O’Connell 2018), vulnerable to fuel prices, foreign
exchange, interest rates and high competition (MERKERT and SWIDAN 2019;
STAMOLAMPROS and KORFIATIS 2019).
The industry has been exposed to dynamic external environment, regulations, technology,
customers preference, intense competition, labor cost, fuel prices and security measures and so forth
(Riwo-Abudho et al. 2013).

Airline industry performance is contingent to macro-predictability, micro-uncertainty and macro

environmental factors (Mhlanga 2019). Airlines industry has always been exposed to exogenous
events. Terrorist attack of 9/11 has put the industry into depression making number of airlines
bankrupt.
Those who rescued from the effect have been grabbed with the oil crisis of 2002 (Yang 2007). The
entry of low cost carriers (LCC) in 2006 triggered turnaround changes in the industry in terms of
pricing strategies and well as competition level (Belobaba 2011).
The LCCs pricing and revenue management strategies threaten the commercial viability of
traditional model, compelling the changes in conventional airline revenue management practices
(Michaels and Fletcher 2009).
The paper examines how they differ in their approach, how airlines are responding and what
constitutes an effective response in the changed airline business world. This includes consideration
of all the marketing levers (product, price, promotion and distribution) in an integrated way, as well
as developments needed in the core revenue management systems themselves (Michaels and
Fletcher 2009). Online bookings, access to airline tickets on internet has made price
competitiveness as an important parameter of airline's success (Ratliff and Vinod 2005).

21
India Airlines market despite of being the fastest growing market (Mahtani and Garg 2018), has
been one of the toughest aviation markets in the world, due to high fuel prices, overcapacity and
intense price competition (Saranga and Nagpal 2016). Notwithstanding the extensive
infrastructural development supported by government, airlines in India often combat financial
distress with the changing dynamics of internal and external environment (Mahtani and Garg
2018). Indian aviation industry in India has undergone rapid transformation with the liberalisation
of Indian aviation sector (Singh 2016).

India began to relax controls on its airline industry in 1986, allowing willing entrants to add
system’s capacity. However, financial performance of the airlines remains challenging owing to
inappropriate policies, restricted capacity allocation on profitability basis (Hooper 1997).
Liberalisation of air travel services and the advent of low-frill airlines have changed the panorama
of Indian Civil Aviation in terms of demand as well as supply (Ohri 2012; Srinidhi 2010).

Reformation of regulatory policies resulted in three-fold increase in the number of scheduled

airlines and a five-fold increase in the number of aircraft operated (O’Connell and Williams 2006).
The increased interconnectivity within the global airline markets has altered the dynamics of
external environment and internal operations (Riwo-Abudho et al. 2013; Singh 2016).
Success and survival in this milieu warrants for coherent strategies adapting with market flavour
(Pathak 2015).

Entry of the LCCs in India in 2003, with first 'no-frills' airlines- Air Deccan has changed the
dynamics of Indian domestic aviation market (Sakariya et al. 2009). Low-cost carrier (LCC) by
enhancing affordability of air travel has stimulated the demand for air travel in India (Krämer et al.
2018; Wang et al. 2018).
Undoubtedly, low-frill operation has proved to be a successful business model in the industry
(Alamdari and Fagan 2005). Budget airlines and small chartered airlines witnessed more efficient
in the system (Dhanda and Sharma 2018; Jain and Natarajan 2015; Saranga and Nagpal 2016)
and dominated the Indian airline market (Deeppa and Ganapathi 2018; Wang et al. 2018).

22
The LCC in India have managed to achieve significant operational efficiencies with the rigid cost
structure, heavy taxes, high landing and parking charges, undesirable regulatory factors (Saranga
and Nagpal 2016). India’s low cost carriers show better scale efficiency vis-à-vis their full service
competitors (Sakthidharan and Sivaraman 2018).

Low Cost Airlines have been witnessed advantageous in utilising their capacity compare to the full
service airlines which strives hard to attain break-even capacity (Thirunavukkarasu 2015).
However, the inexorable rise of LCC has made the industry more volatile (Doganis 2005). Intense
competition and enhanced capacity have made cost effectiveness as the daring need for survival and
sustainability.
Financial performance of airlines is vulnerable to both internal conditions of the company and as
well the external environment. Operating factors, namely, operating revenue per air kilo meters,
capacity, cost structure, load factor dictate the operational output of the airlines and their
commercial stability. From the external environment, ATF prices largely affect airlines profitability
in India. Also, annual inflation and GDP growth rate in the country has a major influence on the
sustainability of the airlines in India (Mahtani and Garg 2018).

With uncontrollable cost behaviour, tight margins and cut-throat market, survival and subsistence of
airlines largely depends on its ability to maximise their customer base (Singh 2016). Fierce
competition compel the airlines to optimises their revenues (Josephi 2005; Krämer et al. 2018).

In the backdrop of Covid pandemic outbreak, the globally airline industry has been adversely
affected. Airlines in India which have been observed vulnerable to withstand the cyclic economic
disruption (of fuel prices, inflation, devaluation of currency and demand shock), certainly be
entering into a tough time with extremely low demand and ever mounting losses. Present study
attempts to analyse the financial impact of Covid pandemic on airlines in India and possible impact
of their financial strengths and weakness. Further study suggests possible way-outs of sustaining
operating viability.

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 CHAPTER - 3
RESEARCH METHODOLOGY

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RESEARCH

Research in common parlance refers to a search for knowledge. Once can also define research as a
scientific and systematic search for pertinent information on a specific topic. In fact, research is an
art of scientific investigation.
Research is an academic activity and as such the term should be used in a technical sense.
According to Clifford Woody research comprises defining and redefining problems, formulating
hypothesis or suggested solutions; collecting, organising and evaluating data; making deductions
and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit
the formulating hypothesis.

OBJECTIVES OF RESEARCH

Though each research study has its own specific purpose, we may think of research objectives as
falling into a number of following broad groupings:

1. To gain familiarity with a phenomenon or to achieve new insights into it.

2. 2. To portray accurately the characteristics of a particular individual, situation or a group.
3. 3. To determine the frequency with which something occurs or with which it is associated with
something else.
4. 4. To test a hypothesis of a causal relationship between variables.

MOTIVATION IN RESEARCH

The possible motives for doing research may be either one or more of the following:

1. Desire to get a research degree along with its consequential benefits.

2. Desire to face the challenge in solving the unsolved problems, i.e., concern over practical
problems initiates research.
3. Desire to get intellectual joy of doing some creative work.
4. Desire to be of service to society.
5. Desire to get respectability.

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TYPES OF RESEARCH

The basic types of research are as follows:

(i) Descriptive vs. Analytical: Descriptive research includes surveys and fact-finding enquiries of
different kinds. The major purpose of descriptive research is description of the state of affairs as
it exists at present. The main characteristic of this method is that the researcher has no control
over the variables; he can only report what has happened or what is happening. On the other
hand, In analytical research, the researcher has to use facts or information already available, and
analyse these to make a critical evaluation of the material.

(ii) Applied vs. Fundamental: Research can either be applied research or fundamental research.
Applied research aims at finding a solution for an immediate problem facing a society or an
industrial/business organisation, whereas fundamental research is mainly concerned with
generalisations and with the formulation of a theory.

(iii) Quantitative vs.Qualitative: Quantitative research is based on the measurement of quantity or

amount. It is applicable to phenomena that can be expressed in terms of quantity. Qualitative
research, on the other hand, is concerned with qualitative phenomenon, i.e., phenomena relating
to or involving quality or kind.

(iv) Conceptual vs. Empirical: Conceptual research is that related to some abstract ideas or theory.
It is generally used by philosophers and thinkers to develop new concepts or to reinterpret
existing ones. On the other hand, empirical research relies on experience or observation alone,
often without due regard for system and theory. It is data-based research, coming up with
conclusions which are capable of being verified by observation or experiment.

(v) Some Other Types of Research: All other types of research are variations of one or more of
the above stated approaches, based on either the purpose of research, or the time required to
accomplish research, on the environment in which research is done, or on the basis of some
other similar factor.

26
SOURCES OF DATA COLLECTION

(a) Primary Data Collection Sources:

It has been collected by forming a proper questionnaire. Questionnaire is a systematic and

structured manner of collecting data for conducting experiment. The nature of the questionnaire is
very inductive and fundamental. It has been kept in a proper framework to make it clear to the
retailers.

Primary data can be collected in five main ways:

1. Observations

2. Focus groups

3. Surveys

4. Behavioural data

5. Experiments

Among these, ‘survey method’ was selected to collect the primary data. Only 15-20 users were
contacted because of the ongoing pandemic and collected the required data relevant to this project.

(b) Secondary Data Collection Sources:

Information was collected from secondary sources such as customer survey, newspapers,
advertisements, newsletters, articles, etc.
Beside these the use of internet was also made in collecting relevant information. The data collected
from the above-mentioned sources has been adequately structured and used at appropriate places in
the report. The data which is collected for the project will be classified as a secondary data, because
it is made through the information provide in the newspaper and internet. There is no door to door
survey or any questionnaire; all the information was made through the help of Wikipedia,
newspaper, magazines and other search engines.

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RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It may be understood
as a science of studying how research is done scientifically. In it we study the various steps that are
generally adopted by a researcher in studying his research problem along with the logic behind
them. It is necessary for the researcher to know not only the research methods/techniques but also
the methodology. Researchers not only need to know how to develop certain indices or tests, how to
calculate the mean, the mode, the median or the standard deviation or chi-square, how to apply
particular research techniques, but they also need to know which of these methods or techniques,
are relevant and which are not, and what would they mean and indicate and why. Researchers also
need to understand the assumptions underlying various techniques and they need to know the
criteria by which they can decide that certain techniques and procedures will be applicable to
certain problems and others will not.

RESEARCH PROCESS

1. Formulating the research problem

2. Extensive literature survey

3. Development of working hypothesis

4. Preparing the research design

5. Determining sample design

6. Collection of data

7. Execution of the project

8. Analysis of the data

9. Hypothesis testing

10. Generalisations and interpretation

11. Preparation of the report

28
CHAPTER 4 :- ANALYSIS AND
INTERPRETATION

29
DATA ANALYSIS

Data Analysis is the process of systematically applying statistical and/or logical techniques to
describe and illustrate, condense and recap, and evaluate data.
While data analysis in qualitative research can include statistical procedures, many times analysis
becomes an ongoing iterative process where data is continuously collected and analysed almost
simultaneously.

Types of Data Analysis

There are several types of Data Analysis techniques that exist based on business and technology.
However, the major Data Analysis methods are:

• Text Analysis
• Statistical Analysis
• Diagnostic Analysis
• Predictive Analysis
• Prescriptive Analysis

Considerations/issues in data analysis

There are a number of issues that researchers should be aware of with respect to data analysis.
These include:

• Having the necessary skills to analyse

• Concurrently selecting data collection methods and appropriate analysis
• Drawing unbiased inference
• Inappropriate subgroup analysis
• Following acceptable norms for disciplines
• Providing honest and accurate analysis
• Manner of presenting data
• Environmental/contextual issues

30
DATA INTERPRETATION

Data interpretation refers to the implementation of processes through which data is reviewed for the
purpose of arriving at an informed conclusion. The interpretation of data assigns a meaning to the
information analysed and determines its signification and implications.

The importance of data interpretation is evident and this is why it needs to be done properly. Data is
very likely to arrive from multiple sources and has a tendency to enter the analysis process with
haphazard ordering. The interpretation of data is designed to help people make sense of numerical
data that has been collected, analysed and presented. Having a baseline method (or methods) for
interpreting data will provide your analyst teams a structure and consistent foundation.

TYPES OF DATA INTERPRETATION

Disparate methods will lead to duplicated efforts, inconsistent solutions, wasted energy and
inevitably – time and money. In this paper, we will look at the two main methods of interpretation
of data: with a qualitative and a quantitative analysis.

1) QUALITATIVE DATA INTERPRETATION

Qualitative data analysis can be summed up in one word – categorical. With qualitative analysis,
data is not described through numerical values or patterns, but through the use of descriptive
context

2) QUANTITATIVE DATA INTERPRETATION

Quantitative analysis refers to a set of processes by which numerical data is analysed. More often
than not, it involves the use of statistical modelling such as standard deviation, mean and median.

RESULTS

A survey was conducted to analyse the Indian Aviation Industry: Covid-19 Effect with regards of
frequent travellers. The survey involved sending a detailed questionnaire to respondents via Google
Link and 55 responses were received. The responses are illustrated in the below graphs for
reference.

31
QUESTIONNAIRE

Q1. How soon do you plan for a visit out of your city?

Q2. Which mode of travelling would you prefer to travel in the near future?

Q3. Why do you prefer taking a flight over any other mode of travel especially post
this pandemic?

Q4. Do you support the airfare to increase after lockdown?

Q5. Do you support he idea of lockdown in India extension even after June, 2021?

Q6. How soon do you think international travel should be allowed?

Q7. Would you choose leisure travel in 2021?

Q8. Do you genuinely follow the sanitary procedures to protect yourself from
COVID 19?

Q9. Post September do you plan to have physical meetings than the current scenario
of con call or webinars?

Q10. Do you prefer Indian airline over any international brand even for domestic
travel?

(This questionnaire was circulated to family, friends and friends of friends via
WhatsApp and google forms, the responses were recorded as following below)

32
THE RESULTS ARE AS FOLLOWING IN THE FORM OF PIE CHARTS AND
PERCENTAGES :

QUESTION 1

Interpretation: About 34% of citizens do not feel safe to even go out of their city in 2021 .

QUESTION 2

Interpretation: About 58% travellers feel it is ideal to travel via aircraft.

33
QUESTION 3

Interpretation: Around 57% travellers prefer travelling via airlines due to safe hygienic and sanitary
procedures they follow.

QUESTION 4

Interpretation: 60% of the travellers do not support the idea of airfare to hike.

34
QUESTION 5

Interpretation: Around 71% of citizens feel the travel restrictions should be extended even after
June, 2021 with extension in lockdown.

QUESTION 6

35
Interpretation: 44% of travellers feel that International Travel should not be allowed in
2021.

QUESTION 7

Interpretation: Around 51% of frequent travellers would not prefer any leisure travel this year.

QUESTION 8

Interpretation: About 93% people genuinely follow and support the sanitary procedures
for protection against COVID -19.
36
QUESTION 9

Interpretation: 55% People still do not feel safe to conduct physical conference even after
September.

QUESTION 10

Interpretation: 62% travellers prefer Indian Airline brands for their travel.
37
 CHAPTER 5 :-
CONCLUSION AND
RECOMMENDATION

38
CONCLUSION

Post COVID-19, flying is going to be the safest mode of travel. It can be strongly said that it is safe
to fly in the post-COVID world with some precautions, as compared to other modes, where the air
is not filtered as efficiently as any aircraft. The airflow inside the aircraft is from the top to bottom,
where fresh air comes from the top and is sucked out by vents on the floor level.

Due to this air cycle, the air inside the aircraft is nearly as good as new every three minutes
approximately. On top of it, the very high-quality HEPA filter in the aircraft is capable of cleaning
even tiny particles and that includes viruses like the coronavirus.

We can safely say that it is safe to fly in the post-COVID world with some precautions, as
compared to other Precautions are likely to include temperature checks of passengers, masks, and
other protective gear mandatory for passengers. While the dangers of Covid-19 are present, human
psychology may misinterpret and modulate many aspects of an epidemic that could manifest flight
anxiety among happy fliers. Flight-related anxieties may limit people from embracing air travel to
not flying at all. Lack of social distancing will be seen as the limiting factor in ensuring wellbeing
onboard aircraft.

The fact that this limitation can be overcome with alternative means may remain poorly understood
by some. Indian Government had resumed domestic flights from 25th May, 2020 after nearly two
months of deferral due to the coronavirus outbreak but placed lower and upper limits on airfares
depending upon the flight duration.

Further, they started with international flights as well till April 2021 but as the nation faced the
second wave of Covid 19, the government put a halt on them too. Soon, if all goes properly, the
DGCA is planning to resume the flights on full capacity as soon as possible. The Indian
government-imposed upper and lower limits on airfares could even be extended beyond August 24
depending upon things.

39
The Covid-19 pandemic is such a fraught time for airlines due to the problem in predicting when
the crisis will end. This can complicate determining whether it's a more temporary credit crunch or
a deeper solvency concern. Above all, the sector is viewing grim recession ahead. In this backdrop,
the operation viability of airlines seems conditional on the recovery of variable expenses.
Sustainability of airlines warrants of turnaround changes in their revenue strategies and operating
models. Focus on minimising losses rather than profit maximisation possibly can help the airlines to
combat current situation.

In this paper, we examined the nature and dynamics of COVID-19-inspired innovations. We

developed an integrated approach and advanced the concept of
“COVI-NATION” to denote the innovation opportunities stemming from COVID-19. Evidence was
drawn from the global airline industry to illustrate a number of COVID-inspired processes and
product innovations that were implemented in an attempt to respond to the crisis. Although the
crisis has led to the disruption of well-established routines and processes, the threats to the survival
of multiple global airlines appear to have encouraged employees to embrace change. Our inquiry
has revealed that airlines have innovated across the value chain to respond to the crisis. Among the
ample innovations stemming from the crisis or COVID-19-inspired innovations are inflight social
distancing, disinfecting aircraft with UV, utilising touch less technologies at airports, an open-
middle-seat policy, accelerated use of biometrics at check-in, and COVID-19 insurance. By seeking
to offset disruption caused by the COVID-19 pandemic, many organisations have embraced
innovation via seeking insights from partners, customers, and governments in implementing new
processes.

Many airlines have focused on thorough cleaning of aircraft to reassure their customers of their high
standards. To keep pace with the competition and remain at the forefront of health and safety
requirements, airlines are now competing on hygiene grounds as a cornerstone of tools to outwit
competitors. In addition, many airlines will need to implement touch less technologies to reduce
costs and offer the highest level of hygiene as a means of competing. There is a possibility that the
innovations are likely to be context-specific. Thus, the innovations emerging from the crisis may
require a higher degree of adaptation and transformation to make them relevant in new contexts,
i.e., post COVID-19.

40
THE WAY AHEAD

• It is also possible that prolonged, severe shortage of capital and an awareness of the climate crisis
could, hypothetically, lead to massive change. But governments’ concern for jobs is probably
going to displace environmental concerns. Political forces on the left and right would need to
mend fences and agree that, during a depression-like scenario, a replacement world is required ,
not just a replacement normal.

• The concept of air travel will undergo a sea of change with more sanitary precautions and
procedures. Social distancing will lead to fewer passengers on the plane leading to only 50% of
airplanes capacity being utilised. This would eventually lead to making aviation commercially
unviable.

• To overcome this economic barrier the airlines will hike the airfare and will challenge them to
look at alternative avenues that would allow aircraft to fill to capacity and be Covid-19 free.
Emphasis would be laid on technological innovations for contactless processes. Some processes
will be applied globally, e.g. use of mask, social distancing at all times, and minimal movement
inside the aircraft. It while be more reassuring to fly with minimum instances of contact. Flight
attendants will play their primary role as “Safety Attendants” and also as a on board Health
Inspector. Turnaround times for aircraft will significantly increase.

• The aircraft apart from just being cleaned will be disinfected. Such Turnaround time may be
annoying for passengers on multi hop journeys. Mapping of travel history will be a mammoth
task for travellers who fly over airline networks spanning continents.

• The demand for business class is sure to hike as the personal space is reassuring; it gives more
sense of health and space security. International travel will remain limited with strict immigration
control at airport, which may include being quarantine on arrival.

• Airfare hike is the least that airlines can do. Air travel may get costlier. Until complete revival
from Covid-19 is done, every airline will have to make its own strategy to overcome from the
negative effects from the pandemic attack.

41
• The route map may change dropping may tier two and three cities. Smaller planes will be used for
international travel. Vaccine is the only solution to this novel corona virus; it may take
coordinated effort over the time. Till then we all have to accept this challenging new normal.
Indian Aviation is quickly adapting, evolving and technologically innovating their operations area
to overcome the challenge. It will take a lot of continuous effort for having the flying sky back.

• Even in this challenging time we have to stay motivated, focused and futuristic and remember that
people will never stop travelling, it is just a halt, business and busy airports will be back soon on
full capacity.

“ The aviation industry has repeatedly shown the resilience to come back stronger, bolder and
smarter from previous crises that have threatened to disrupt the status quo. There is a need for a
sharp, rational and consistent approach to reforms to help the industry cruise at a newer and
higher altitude and redefine its new normal. The changing geo-political scenario and impending
power shifts globally also demand a swift and adroit approach. Expedient policy changes will be
required to exploit the opportunity, accrete strategic gains and create a better future.”

42
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