Omicron threat has potential to derail domestic aviation recovery: ICRA

The threat posed by the Omicron variant of the coronavirus has not only delayed the resumption of international flight operations, but it also has the potential to derail the recovery of the domestic aviation sector if it sparks a fresh round of lockdowns or curbs, research conducted by ICRA (Investment Information and Credit Rating Agency) said.

It also underlined that though the recovery in the sector continued, the demand from the corporate traveller segment was subdued as was reflected by the passenger traffic being lower by around 19% in November 2021 compared to pre-Covid levels.

Domestic air traffic grew by around 15-16% with around 10.4-10.5 million passengers flying last month, compared to around 8.98 million fliers in October 2021. Year on Year figures showed that with around 80,750 departures in November 2021, airlines’ capacity deployment was around 49% higher than November 2020 when 54,132 departures were recorded, the agency said. it added that the number of departures in November 2021 was higher by around 12% compared to October 21 since Covid-19 infections demonstrated a downward trajectory.

“The threat of [the] new variant, which has pushed [back] the resumption of scheduled international operations, has the potential to derail the domestic recovery too, if it becomes a source of fresh round of lockdowns/restrictions in the near term,” Suprio Banerjee, ICRA’s vice president and sector head said.

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Talking of the gradual recovery in the domestic sector, Banerjee said that in November 2021, the average daily departures were at around 2,700, significantly higher than 1,806 daily departures in November 2020, and higher than around 2,400 in October 2021. He added that the average number of passengers per flight during November 2021 also rose to reach around 129, against an average of 125 in October 2021.

“Though the recovery continued in November 2021, demand continues to be subdued from the corporate traveller segment as reflected by the passenger traffic being lower by around 19% in November 2021 compared to pre-Covid levels,” he added.

On November 26, the director general of civil aviation (DGCA) announced resumption of scheduled International operations from December 15 with some restrictions. However, the regulator had to postpone it till further notice, due to the spread of the Omicron variant.

Under the Vande Bharat Mission (VBM), which started from May 7, 2020, international passenger traffic for Indian carriers stood at around 5.7 million till November 30, 2021.