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Civil Aviation Minister Puri's 'optimistic reading': Indian aviation to get back to 2019 levels by year-end, Air India divestment is on

Hardeep Singh Puri added that domestic flights will scale up 55 percent of their original schedule by mid-July. They are operating at less than 30 percent, right now

June 21, 2020 / 06:06 AM IST
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In what he admitted is the most "optimistic reading" of the aviation industry for any country, Civil Aviation Minister Hardeep Singh Puri said he expects India's domestic sector to reach pre-COVID-19 levels anytime between Diwali and the end of this year.

"We will get to 55 percent of the original summer schedule by mid-July....and then you have four-and-a-half months to Diwali," said the minister, before adding that the sector will reach its 2019-level by the end of this year.

Diwali, this year, falls on November 14.

At present, domestic operations - which resumed on May 25 -  are running on one-third of the summer schedule. The Minister reiterated that by the time the domestic flights scale up to 55 percent, international flights will be reopened in some form or the other.

Puri, who was addressing a media briefing in Delhi on June 20, added that by mid-July, the fourth phase of the Vande Bharat Mission repatriation exercise will be on. He hinted that while the Mission itself would have scaled up further in its fourth phase, international operations will also begin.


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Underlining his outlook, the Minister said to a media person in a lighter vein, "You want to bet... am not a betting man, and don't have much money either."

In 2019, he pointed out, the Indian aviation industry flew an average of 3.5 lakh passengers a day. Airlines operated about 650 aircraft between them.

In contrast, the aviation industry at present flies about 60,000 passengers a day and much of the fleet remains grounded.  Even the one-third quota for flights that the government allows, has not been filled. Since the flights resumed, Puri informed, the highest for a day has been 72,000 passengers.

Puri's optimism though goes against the mood that otherwise prevails in the industry. Earlier this week, Ronojoy Dutta, Chief Executive Officer of IndiGo, said that the country's largest airline expects to operate 70 percent of its pre-COVID-19 flights by the end of 2020. Senior executives from other airlines admit that getting to even 70 percent will be a tough ask.

So what makes Puri so optimistic?

International comparison

The Minister perhaps takes the cue from what's happening in the aviation industry of other countries.

Even at 25 percent of the original schedule, which most of the airlines are now operating, the Indian domestic industry seems to be doing better than most of its international peers.

Puri pointed out that in the US, 28 percent of  flights are operational. The number in the UK is 6.9 percent, in Australia about 15 percent,Germany 4.9 percent, and 9 percent in Brazil. Only China seems to have got its domestic pie nearly in place, already opening 80 percent of its pre-COVID-19 flights.

In India, to further push the demand, the Ministry plans to open up more routes and increase frequency of flights on routes that are seeing heavy demand.

"By the time we reach 55 percent, which is about 1.5 lakh to 1.6 lakh passengers a day, we can think of opening up international flights," Puri said.

While opening the skies from May 25, the government had fixed the schedule and a fare band till August 24.

Scaling up Vande Bharat Mission

Puri said that the government plans to further scale up Vande Bharat Mission flights.

The repatriation exercise, which started off with 64 flights bringing back 12,000 Indians in the first phase, has now scaled to 581 flights in its third phase. Till now, 1.09 lakh Indians have come back.

Moreover, Air India will operate 300 additional flights, the Minister said. He added that private airlines have been allotted 750 flights, but didn't specify if these are for just the third phase. The fourth phase will being in July.

While Air India had got near monopoly in the first two phases, private airlines - IndiGo, Vistara and GoAir - have joined the exercise now. 

The Minister pointed out that while the private airlines will not have market fares for these flights, he also hinted that these carriers are charging fares that are 'comparable' to those charged by Air India.

Air India divestment

Though divestment of the national carrier has been delayed because of COVID-19, Puri said he wasn't more sure of the process being successful, than he is now.

"I have never been as hopeful or optimistic about Air India divestment as I am now," said the Minister. He added the the Vande Bharat exercise has shown that the airline has the required resources - pilots, routes, destinations and fleet -to attract investors.
Prince Mathews Thomas heads the corporate bureau of Moneycontrol. He has been covering the business world for 16 years, having worked in The Hindu Business Line, Forbes India, Dow Jones Newswires, The Economic Times, Business Standard and The Week. A Chevening scholar, Prince has also authored The Consolidators, a book on second generation entrepreneurs.
first published: Jun 20, 2020 05:44 pm

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