Aviation industry’s usually strong quarter fails; sector may see improvement only after October

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Published: April 9, 2020 1:04:04 PM

While Q1 of a financial year is the strongest period for the airline industry, this year has started rough for the aviation sector due to coronavirus.

As the deadline for the lifting of lockdown nears, domestic operations of the airlines are expected to restart in a phased manner.

While Q1 of a financial year is the strongest period for the airline industry, this year has started rough for the aviation sector due to coronavirus. However, the sector may expect improvement only after Q3, a research report said. “For Indian carriers, typically Q2 is the strongest period while Q2 is a weak quarter. In this fiscal, as the lockdowns/shutdowns are playing out in Q1, we expect gradual improvement in the dynamics of the Indian aviation industry only from Q3FY21,” Motilal Oswal said in a report on Thursday. Domestic carriers are now looking to resume operations as soon as the lockdown lifts.

As the deadline for the lifting of lockdown nears, domestic operations of the airlines are expected to restart in a phased manner. The government had earlier put travel restrictions on both the domestic and international operations to keep the spread of the virus under control. However, the same has dealt a massive blow to the airline industry with many airlines now facing financial crunch. As the airline industry struggles, the Minister of Civil Aviation Hardeep Singh Puri had recently said that his “heart goes out” for the people who are hit by the current situation and said that the government will lift the restrictions on the airlines as soon as it is confident that the coronavirus situation is under control. 

“Post the lockdown, domestic operations (mainly on key/metro routes) should see a staggered start to operations. Indian carriers are using a hawk-eyed approach in resuming domestic operations,” the report said. Aviation industry is one of the worst hit sectors due to coronavirus and has also had a trickle down effect on allied sectors such as hospitality and hotels, according to various reports. The situation has been dire for the industry with leading players such as SpiceJet and IndiGo announcing paycuts for their employees. Budget carrier SpiceJet has also returned five of its wet-lease aircraft in order to cut costs. 

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