Business

Up to 40% of planes may stay on ground for 12 months: CAPA

Domestic demand for air travel may fall 60% to 90 mn trips

Nearly 40% of the combined fleet of Indian airlines may not take to the skies in the next 12 months as the demand for air travel is likely to remain subdued, according to aviation consultancy firm CAPA.

In its latest report on the impact of COVID-19 on the Indian aviation sector, the Centre for Asia Pacific Aviation (CAPA) has forecast that the demand for domestic air travel will decline 60% to about 80-90 million trips, and for international travel it may drop 50% to approximately 35-40 million in the current fiscal as compared with the last financial year.

Of the total fleet size of 650 aircraft, as many as 200-250 planes are likely to remain surplus for the next 6-12 months, CAPA noted.

“Demand will be suppressed due to economic dislocation; slow or even negative GDP growth; broken supply chains; low consumer confidence; and concerns about lingering outbreaks of COVID-19, especially if travel insurance companies refuse to provide cover for associated medical expenses or travel disruption costs.”

With domestic and international flights suspended by the Indian government until April 14 and flight operations likely to resume only in a staggered manner, CAPA said that the first quarter of the current fiscal was likely to be a washout, and airlines could be expected to “limp back to recovery” in the second quarter, which is traditionally a week season for travel demand.

Conservative number

“For India, to return to a pre-COVID operational fleet of 650 aircraft is likely to take up to 12 months from the time that restrictions are lifted, and this may be conservative.

“A gradual path to recovery is expected in quarter three and four.”

The slump in demand may force some airlines to return their aircraft to lessors to save on rental costs.

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Printable version | Jul 2, 2020 9:59:03 PM | https://www.thehindu.com/business/up-to-40-of-planes-may-stay-on-ground-for-12-months-capa/article31274152.ece

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