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Wednesday, April 14, 2021

Domestic flights, explained: Why airlines are flying fewer routes despite govt allowing more capacity

Indian airlines are running their operations at a significantly lower capacity than what is allowed. Why?

Written by Pranav Mukul , Edited by Explained Desk | New Delhi |
Updated: January 30, 2021 10:53:37 am
A CISF personnel guides travelers at Kempegowda International Airport in Bengaluru. (PTI Photo: Shailendra Bhojak)

Despite the government allowing 80% of scheduled flight capacity to be operated on domestic flights, Indian airlines are running their operations at a significantly lower capacity.

In the latest update on domestic aviation, Civil Aviation Minister Hardeep Singh Puri said Saturday that 2.57 lakh passengers flew on 2,211 flights on Friday with total flight movements being at 4,421 and total footfalls at airports being recorded at 5.18 lakh for that day.

Why has the government restricted flight capacity?

When the Centre announced reopening of domestic flights May 25 onwards, after a two-month lockdown, it wanted to gradually increase the capacity that airlines can deploy to ensure that air travel does not suddenly begin contributing to the Covid-19 spread. Along with this, to ensure the well being of passengers as well as the airlines, the government had imposed a ceiling and a floor on the air fares, according to various sectors.

Do those restrictions still hold?

Initially, the government had allowed airlines to operate only 33% of the flights that they used to prior to the Covid-19 lockdown. This meant if an airline operated 100 flights, it could only operate a maximum of 33 flights upon the resumption of domestic operations. This limit was gradually increased from 33% to 45% to 60% to 70% and in the last change back in December, it was increased to 80%. Furthermore, earlier this month, even as the government extended the restrictions on domestic air fares till March 31, it allowed airlines to sell only 20% of the tickets below the median fare. Prior to this, airlines were compelled to sell at least 40% of the seats on a flight below the median fare.

Does the government plan to further relax the restrictions?

Even as the government has began the exercise of further relaxing the capacity restrictions, when the final decision will be made is yet unknown. The number of flight movements and total footfalls at airports recorded for January 21, as pointed out by the civil aviation minister, is still at 68% and 57% of the daily average for January 2020, respectively. Also, it is learnt that so far none of the domestic airlines have managed to deploy the currently allowed capacity of 80%.

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How are airlines responding to the lower passenger numbers?

In anticipation of lower load factors in the post winter holidays season, almost all of the domestic airlines have launched discount sales in an effort to sell tickets and raise cash. As a result of this, air fares in January have witnessed a decline over December. For example, according to data provided by online travel agency ixigo, one way average fare between Delhi and Mumbai for January 8-14 period was at Rs 3,948, which was 23% lower than Rs 5,129 during the December 8-14 period.

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