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The International Air Transport Association (Iata) urges the Indian government to remove capacity restrictions and price caps imposed during the Covid-19 pandemic, saying that such regulations restrict competition, market access and the growth of the aviation industry.
Willie Walsh, Director General of the International Air Transport Association, said that the Indian government should make decisions based on data and science and remove restrictions that hinder the recovery of the aviation industry.
Walsh said: “Politicians are quick to take measures, but the cancellation measures are very slow,” he pointed out that the travel bubble is not for long-term use, but to allow citizens stranded in other countries to return. He said that the current global situation is different from last year.
After the second wave of pandemic, India suspended the operation of international flights. However, the country has established an air travel bubble with more than 25 countries. More than a year ago, the Ministry of Civil Aviation imposed restrictions on capacity and fares in May, when flight services were restored for the first time after the nationwide blockade.
The top aviation industry body composed of 290 airlines has been reiterating its request to lift restrictions. It has stated in the past that all restrictions should be temporary and should be lifted as soon as possible. Walsh advocates the removal of restrictions based on data collected by Iata, which predicts that these restrictions will have catastrophic economic effects on the industry.
Walsh said he was surprised to see the government adopting restrictions because Air India, especially domestically, has achieved tremendous growth in the past decade.
“recover [of the aviation sector] Are severely affected by regulations,” Walsh said. When the restrictions imposed by the government are relaxed, passenger demand will resume, he said.
The trade body includes Indian airlines such as Air India, IndiGo, Vistara, and SpiceJet. It is expected that airlines operating in the Asia-Pacific region, including India, will report a total loss of 7.5 billion U.S. dollars for the 2021 calendar year, down from 31.7 billion U.S. dollars in 2020 .
Global airlines are expected to lose 38.7 billion U.S. dollars in 2021, which is lower than the 2020 loss of more than 118.5 billion U.S. dollars. According to the latest data from IATA, major global aviation markets are expected to return to pre-pandemic levels in 2019 or passenger transport levels in 2019, 2023, and in some cases 2024, depending on geographic location.
Walsh said that compared with other domestic markets (such as the United States, China and the European Union), India is still an outlier. These markets are growing and are not expected to return to 2019 production capacity until 2023-24.
Walsh said that many Indian airlines have reduced their fleet size, retired old aircraft, and reduced jobs and capacity, so their ability to reintroduce the capacity that appeared last time in 2019 is limited.
“Given the pressure on the balance sheet, they will be less willing to take risks,” he said.
In the face of the challenges posed by the pandemic, global airline agencies have been urging governments to reopen borders, abolish strict quarantine measures, and digitally manage vaccination and testing certificates.
“There is a real risk of airline failures, especially small and medium-sized airlines. Therefore, Iata has asked governments to intervene,” Iata’s Asia-Pacific regional vice president Conrad Clifford (Conrad Clifford) said in a virtual presentation.
India allows its airlines to operate up to 65% of pre-pandemic capacity. As new Covid-19 infections decrease and vaccination campaigns increase, these restrictions are expected to be relaxed in the coming months.
issacjohn@khaleejtimes.com
Isaac John
The editorial director of Khaleej Times is a well-connected Indian journalist and economic and financial commentator. He has worked in mainstream journalism in the UAE for 35 years, including 23 years in Khaleej Times. He is a graduate of English major and a graduate of economics major, and has won more than 20 awards. He is widely praised for his real and insightful analysis of global and regional business and economic trends, and is respected for his keen understanding of local business scenarios.
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