Govt likely to take a call on domestic airline capacity utilisation by the end of the week as COVID-19 cases rise once again

The number of flights operated by domestic carriers is likely to be pruned shortly, forcing passengers who have made advance bookings to reschedule their travel plans. The Union government is likely to issue directions on restricting flight operations and capacity utilisation as early as this weekend, multiple senior government officials told Moneycontrol.

Significantly, the restrictions are not being imposed unilaterally by the government as was the case during the first wave of the pandemic. Rather, domestic airlines that have experienced a sharp fall in passenger numbers in the past fortnight as also illness among crew members have urged the ministry of civil aviation (MoCA) to bring back caps on flight operations.

“The decision to reinstate a cap on domestic airline capacity utilisation will be taken after the Union civil aviation minister Jyotiraditya Scindia meets the heads of airlines,” a senior government official told Moneycontrol. The meeting is likely to happen by the end of the week.

MoCA and Directorate General of Civil Aviation (DGCA) have been consulting the ministry of health and family welfare and the National Disaster Management Authority on the COVID-19 situation to take a call on curtailing flights. MoCA and DGCA have not received any indication from them to reduce airline operations, sources said.

Government officials also said that the government is considering putting in place a system of graded domestic aviation capacity cuts as cases rise in the country.

As part of the new guidelines the government is working on, the Centre plans to introduce gradual capacity utilisation caps, if the need arises. The first cap on capacity utilisation will be introduced if the country reports more than 50,000 cases daily, a senior government official said.

“If the daily COVID-19 cases cross 50,000, domestic capacity utilisation will be capped at 85 percent,” the official said.

In fact industry insiders expect the government to cap domestic capacity at 80 percent from the present 100 percent by the end of the week due to rising COVID-19 cases. They added that in order to avoid monopolisation of market share by larger airlines, the government is likely to reinstate the domestic capacity cap.

“Many airlines are already considering cancelling flights as they are not able to fill adequate seats and want to reduce cash burn,” a senior airline official said.

According to MoCA data, seat occupancy at various airlines was down to 55 percent to 70 percent. The average daily domestic passengers carried by Indian airlines was also down to around 270,000 daily passengers in the first week of January, compared with the average of 350,000 daily passengers carried in December.

Another senior airline official said airlines in India are also facing crew scheduling and rostering problems as many of their cabin crew and pilots have also tested positive for COVID-19 following the outbreak of the Omicron variant of the virus in India.

He added that asymptomatic crew members and pilots have been mandated to quarantine for 10 days by the DGCA and this is making it difficult for airlines to operate at 100 percent capacity.

A similar situation was seen last year in April when the second wave of COVID-19 wreaked havoc on the Indian aviation market.

Senior executives from the industry had then also asked the government for financial help to keep running operations, reduce the capacity cap and finally strictly enforce the lower fare limit fixed by the government.

The government has allowed domestic flights to fly with 100 per cent capacity since October 18, 2021, in order to meet rising demand from passengers during the festival season in India.

ICRA’s vice-president and sector head Suprio Banerjee in a report this week also said that the emergence of the new coronavirus variant and the recent trend of rising infections, and some states already announcing certain curbs on domestic air travel are posing a serious threat to domestic passenger traffic recovery in the near term.

Earlier this week, IndiGo, India’s largest domestic airline in terms of market share, had announced that it would withdraw 20 percent of its flights as the surge in COVID-19 cases had hit travel demand.

The airline also said it would offer free changes for all new and existing bookings made before January 31 for travel until March 31.

“Where possible, cancellations of flights will be done at least 72 hours in advance and customers will be moved to the next available flight and will also be able to change their travel through the use of Plan B on our website,” the airline, which normally operates nearly 1,500 flights per day, said.