Airlines and hospitality — the two most distressed sectors with their entire business locked during lockdown — are clearly the most disappointed with the government’s economic revival package, as there was nothing specific for them. To be fair, the government did list out some measures for the aviation and airport sectors but they were neither in the nature of an instant relief nor to kickstart operations. They were mostly long-term measures, which have been in the pipeline for long.

Just how badly the airlines are going to be hit by the lockdown can be gauged from the numbers put out by Crisil which said that the aviation industry will crash-land this fiscal with revenue loss of Rs 24,000-25,000 crore in the April-June quarter.

Airlines will be the worst-affected, contributing more than 70% of the losses, or Rs 17,000 crore, followed by airport operators with Rs 5,000-5,500 crore and airport retailers (including retail, food and beverages and duty-free) with Rs 1,700-1,800 crore, Crisil has estimated.

The disappointment over being left out was expressed by SpiceJet chairman and managing director Ajay Singh.
He said on Saturday, “I certainly hope there will be a more significant package for the aviation sector.” His hopes were pinned on the finance minister’s Sunday announcements, which was the fifth and the last tranche of the revival measures.

As is known, due to the cash flow problem, all the airlines have cut salaries of their employees and even sent several of them on unpaid leave.

Similar is the case with the hospitality and retail sectors. Here also according to Crisil’s estimate, the organised dine-in segment of the restaurant industry may see its revenues slashed by as much as 40-50% in the current financial year as consumers are unlikely to get back to restaurants even after the lockdown is lifted.

Pradip Shetty, joint honorary secretary at The Federation of Hotel & Restaurant Associations of India (FHRAI), told FE that about 70-80% of the industry will shut down as due to the lack of financial support, nobody has the wherewithal to run a business. “Business has come down to zero and is likely to remain so for the next six months. You will see a huge number of job losses as it is a labour-intensive sector,” Shetty said.

Anurag Katriar, president at the National Restaurant Association of India (NRAI), told FE that a huge number of job losses and business failures are inevitable, given the lack of stimulus for the sector. “We need a better policy framework to make ourselves self-reliant. It is also clear that we will perhaps be one of the last sectors to open up, which means we perhaps need maximum support to stay alive.

Our primary demands were largely around policy and liquidity support and did not require a massive financial outlay from the government,” Katriar added.

The old hotel chains may survive but a lot of new projects that are heavily dependent on borrowing from financial institutions will have no option but to shut. Many hotels operating in tier-2 and tier-3 cities are unlikely to resume operations. Standalone restaurants are staring at a bleak future too as in-dining will remain stalled for sometime, even when it restarts, it will operate only at 30% capacity which is not viable, Shetty said. “We wanted the government to take care of the wages.

So much funds are lying with the ESIC, some of it could have been used towards salary disbursal. Our expectation of extending soft-loan to the industry at zero interest rate has also not been met,” said a disappointed Shetty.

Rajneesh Mahajan, CEO at Inorbit Mall and director at Shopping Centres Association of India (SCAI), said the biggest requirement is liquidity for the retail sector that directly employs 12 million people in the organised segment. “Our cash inflows have stopped as there is no sale but outflows towards banking, one of the largest components remains along with other fixed costs such as salaries,” Mahajan told FE. The current challenge may lead to rationalisation of portfolios by retailers and further rejigging of team strength, thereby jeopardising some jobs, Mahajan added.