AIRLINE TRANSPORT INDUSTRY
Aviation sectors is perhaps worst hit with covid impact. The preventive restrictive movements
have drastically dented the airlines and allied services with huge losses. According to DGCA, six
days suspended operations of March leads to 33% decline in passenger traffic (from 11.5 million
reported in March 2019 to 7.8 million in March 2020). As per CRISIL Infrastructure Advisory
report, the expected revenue loss to the Indian aviation sector due to lockdown amounts to 240
billion; inter se, airlines account for 70% losses, followed by allied services-Ground handling,
etc. CAPA India estimates the industry staggering losses of 240 to 270 billion in April-June
quarter, assuming operations to remain suspended till June 2020. This imply loss of 2.67 to 3
billion for per day of extended lockdown.
The Indian aviation industry is characterized by high fixed costs of nearly 35 to 40%. These
costs include lease rental, employees cost, interest charges. Per day of suspended operations has
hit the industry at the rate of 75–90 crore loss per day. Table 1 exhibits fixed-cost information
pertaining of four key airlines of India for last three years (FY 2017 to 2019). The costs
mentioned signify the charges that are to be met irrespective of the business operations. The
increasing pattern of expenses over years, prima-facie, signify the expanded operations’ size over
years. Ceteris paribus, no significant change in the operations size and cost for the FY 2019–
2020, per day loss of suspended operations for Inter-globe Aviation accounts for 24 crores,
followed 9.2 crores for SpiceJet, 5.83 crores for Go Airlines and 3.1 crores for air Asia (based on
the 2018–2019 estimates).

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