An imminent threat of more than one airline folding up, both on account of the extended lockdown and little to no relief in the economic package announced by the Finance Minister last week, is learnt to be the reason behind a sudden reversal in the Centre’s stance over a span of just three days, government officials told The Indian Express.
On Sunday, May 17, the government announced domestic travel will remain prohibited till May 31. In just three days, the government on Thursday moved a fresh amendment in the guidelines for permitting passenger flights May 25 onwards.
Even as the move brings a respite to airlines and the various allied sectors, which have lost non-recoverable revenue since being fully grounded almost two months ago, the limited capacity operations with fare regulation and other added costs have left airlines wanting for more.
Indications that the sector could be opened up was first available earlier this month, with Civil Aviation Minister Hardeep Singh Puri stating that domestic commercial flights could resume from May 15 with the rider that domestic infrastructure needed to be in place for flights to restart.
“The main argument put forth by airlines was that since a deferred service cannot be consumed later, so, airlines, alongside hotels, eateries etc, need to be given a bigger assistance over manufacturing firms, especially since India’s lockdown is among the strictest/one of the longest in the world,” a senior government official, in know of the matter, said.
Subsequently, airlines were told by senior civil aviation ministry officials that “a big package” was being announced and that service sectors would find a mention but as it unravelled, the measures announced by Finance Minister Nirmala Sitharaman for civil aviation comprised the ones that were announced before. These included optimisation of Indian airspace, goods and services tax relief for the maintenance, repair and overhaul industry and privatisation of airports.
By Sunday, airlines had sought a meeting with the civil aviation minister on this. According to one senior government official, C-level airline executives started knocking at the ministry’s doors for clarity on whether any more measures, including possibly permission to resume services, were expected for the industry. But MHA guidelines issued on May 17 evening, prohibited commercial air travel till May 31, with no guidance on when it will open again.
On Monday, May 18, airline executives met civil aviation ministry officials and said they could be forced to “sack people en masse and use fleet to pay off mounting debt and were being pushed towards bankruptcy”. They argued that when trains – operated by a state-owned entity – are free to ferry people from red zones to green zones, why can’t airlines fly, given that they have more sanitised operating environments and would mostly be flying from red zones to red zones on routes such as Delhi-Mumbai, or Mumbai-Chennai.
Meanwhile, one low-cost airline sent a mail to its employees warning them of an imminent closure should flight operations not resume at the earliest.
According to a report by the International Air Transport Association (IATA), close to 3 million jobs were at risk in India on account of the stress in the country’s aviation sector, particularly given that it clocked nearly zero revenues since the countrywide lockdown commenced March 25.
“We immediately sought meetings with the government and were called a day later on Monday (May 18). We anticipated that the government would consult us on how to revive the sector after an inadequate bailout package, but the government wanted to discuss aspects such as introducing fare regulation,” an airline executive present in the May 18 meeting, said.
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It was then that the civil aviation ministry conferred with the Prime Minister’s Office seeking intervention to stave off action by airlines. Later on May 19, Puri tweeted appealing states to allow civil aviation operations. A day later on May 20, he announced the resumption of flights from May 25.
When asked at a press conference Thursday about what changed between Sunday and Wednesday, when the move to restart flights was announced, Civil Aviation Minister Hardeep Singh Puri said: “Ten days ago I had said that our airports and airlines are ready to resume operations. Two-three days ago I had said, the decision to open does not rest with the civil aviation ministry alone, we are talking to other stakeholders. The lockdown was till May 31. I had suggested we were ready about a week or 10 days ago but then the feeling was that railways are doing much larger operations. Let us absorb that and get experience from that, then we will come in. Yesterday, the decision was taken. May 25 seems to be right, everyone seems to be comfortable. I’m not saying everybody is 100 per cent comfortable. I was talking to some chief ministers last evening. By and large, everyone now appreciates it.”
While it may have come as a respite for airlines, they have red flagged the government’s attempts to contain the resumption of operations. “We are resuming under contingent measures. To impose fare caps and ask airlines to follow route dispersal guidelines at this time was unexpected. Further, some of the measures like ensuring the passenger receives SMS receipt upon checking in their baggage will require upgradation to our IT systems,” an airline official said.