With the outbreak of COVID-19 beginning to hurt the Indian aviation sector, airlines are grappling with their own financial troubles at the same time while trying to deal with passenger inconveniences and airport operators seeking additional levies in times of a severe slump for the industry.
In a circular sent to all scheduled international airlines Friday, the Directorate General of Civil Aviation advised the carriers to waive off cancellation or reschedule charges to support the passengers. “In view of the unfolding impact of COVID-19, the aviation industry is facing serious challenges. Flights are being curtailed, cancelled and disrupted almost on a daily basis. As a result, passengers are also facing the brunt…In the current scenario, it would be appropriate if airlines support their passengers in this tough time by waiving off cancellation/reschedule charges or by providing any other incentive,” the circular said. While most domestic airlines have waived off date change fees for their passengers, so far none of them are offering free cancellations. Airlines did not respond to e-mail queries seeking comments.
In the aftermath of the outbreak, domestic airlines have cancelled over 100 flights every week. According to official data, foreign carriers had cancelled 492 flights till March-end beginning early last month. However, a spate of cancellations occurred after the government announced Wednesday that it was suspending all visas issued to foreign nationals, barring a few categories, till April 15. In addition to this, Air India Friday cancelled flights to Italy, France, Germany, Spain, Israel, South Korea and Sri Lanka till April 30.
Flight movements of international carriers account for a substantial amount of revenues for airport operators in terms of landing charges, parking fees and other ancillary revenues. This, in addition to the costs being incurred on account of measures to prevent spread of the virus, has made private airport operators reach out to the government to seek relief. In a letter to the Civil Aviation Secretary dated March 11, the Association of Private Airport Operators flagged problems such as “less sales at the food and beverage, and retail outlets” at aerodromes, and proposed “allowing levying of a nominal passenger facilitation charge as part of airline fares to cover increased operating expenses being incurred by the operators”.
Airport operators have argued that they have paid the government’s revenue share portion in advance for the January-March quarter on the basis of certain projections that fell short because of the pandemic situation. To make good on their revenues, they have sought the facilitation charge. Even as government officials this newspaper spoke to acknowledged the proposal, they were non-committal on seeing it through.
Airlines, on the other hand, were quick to dismiss the airport operators’ proposal. “India’s private airports need to do a reality check on their suggestion to impose a new levy at a time when passenger demand is plummeting…What is needed now are relief measures to help the aviation industry, and eventually when the situation is resolved to look at ways to grow demand, instead of a self-serving interest in protecting profits without recognising what is happening in the world,” said Amitabh Khosla, country director –India, IATA. Experts don’t see it a surprise that in an attempt to protect cash-flows, which may be affected if airlines begin to offer refund arising out of flight cancellations, companies have announced promotional schemes to sell all-inclusive one-way tickets for as low as Rs 986. Typically, cheap tickets are offered in bulk to generate immediate cash-flow.
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