Impact of Covid-19 on Indian Aviation Sector

Issue: 1 / 2021

The COVID-19 Pandemic had a massive impact on the Indian aviation sector in 2020. The government also had to extend the deadline for submitting bids for Air India five times during the year. When the Pandemic started spreading across the country, all scheduled international flights and domestic passenger flights were suspended from March 23 and March 25, respectively. Scheduled domestic flights were restarted in a limited manner from May 25. The effect of this disruption can be gauged by the loss figures of India’s two largest airlines. IndiGo incurred net losses of 2,884 crore and 1,194 crore in Q1 and Q2, respectively.

To survive the pandemic-induced crisis, all airlines took cost cutting measures in 2020 like firings or pay cuts. In April, GoAir sent the majority of its employees on leave without pay. Air India had in April, cut the salaries of its employees by ten per cent. At the same time, SpiceJet and IndiGo cut the salaries of all employees by 10 to 30 per cent and 5 to 25 per cent, respectively. In July, IndiGo also laid off 10 per cent of its workforce. AirAsia India in April cut the salaries of its senior employees by up to 20 per cent. Starting April, Vistara implemented a leave-without-pay programme for its employees based on seniority. Currently, the Indian airlines are operating domestic flights at around 80 per cent of their pre-COVID levels. The domestic services are expected to reach their pre-COVID levels by March 2021. With the coronavirus vaccination likely to begin from 2021, the Indian aviation sector is hoping for a much better year ahead as compared to 2020.