A total of 16 foreign airlines have cancelled 492 international flights to India so far due to the novel coronavirus outbreak, Union civil aviation minister Hardeep Puri informed Parliament on Thursday.
Domestic carriers have also taken a hit, as 93 flights have been cancelled per week by Vistara, SpiceJet, IndiGo and GoAir.
Fresh bookings and occupancy in domestic flights have dropped by 15-20% in the wake of the outbreak among passengers.
According to IndiGo, there has been a 15-20% week-on-week dip in daily bookings over the past few days.
“In January and February, IndiGo experienced modest impact from the coronavirus. We cancelled all flights to China and Hong Kong and reduced frequency to certain other south-east Asian markets. This capacity was redeployed in other markets without having a material impact on our revenues,” the airline said in a statement. The carrier is expecting quarterly earnings to be impacted because of the cancellations.
Besides, the rupee has also depreciated sharply which will have an adverse impact on dollar denominated liabilities primarily on account of capitalised operating leases.
“The decision by the government will have an impact on inbound and outbound international travel. So far, there are no restrictions or advisories issued for domestic travel. The period between February till the end of March is typically a lean period because of examination season but we are seeing a demand slowdown for the upcoming summer holiday season especially for international travel. The situation remains dynamic making it hard to quantify actual impact on our business and industry at large,” said Rajesh Magow, Group CEO, MakeMyTrip.
Domestic carriers also noted that the pressure on the Industry may be temporary.
“The aviation sector is under a lot of pressure. But this is temporary. We have been here before. SpiceJet is far better placed than many others to weather this turbulence. I firmly believe that this is an opportunity for SpiceJet, for the government and the aviation ecosystem to create more efficient and viable structures for the growth that lies ahead. SpiceJet will emerge even stronger from this,” said Ajay Singh, chairman and managing director, SpiceJet.
The government on Wednesday suspended all visas to India, as the Covid-19 cases in the country sharply spiked and the World Health Organization declared it a pandemic. Altogether, 74 people in India are infected, according to the Union health ministry.
The Union health ministry said all existing visas — except diplomatic, official, UN/International organisations, employment and project visas — will be suspended till April 15. “This will come into effect from 1200 GMT on March 13, 2020, at the port of departure,” it said.
The travel and tourism industry is staring at a loss of around ~ 8,500 crore. The Indian Association of Tour Operators (IATO) on Thursday also appealed to the government seeking to review the travel ban after 10 days and waive off Goods and Services Tax (GST) on the sector for a period of one month or reducing the rates for the next financial year.
“The situation in India is under control and not as serious as compared to the other countries because of proactive steps taken by the government. However, the ban on travel to India for a period of one month will have a cascading economic impact and will lead to job losses in the entire hotel, aviation and travel sector. We estimate that it will lead to direct loss of not less than ~8,500 crore,” said Rajesh Mudgill, secretary, IATO.
India annually caters to about 10.3 million tourists and another 27 million outbound travellers. The tourism industry has declined by nearly 50% since February onward, according to Subash Goyal, chairman of tourism and hospitality council, Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“ We are facing almost 100% cancellations of all bookings because of the government’s decision to cancel all visas. The government should review the decision in a week or 10 days, as this will have a direct impact on trade. The export and import of essential goods, including medicines and chemicals, need to continue. Tourism industry contributes to one in every 15 jobs in the country, and this move will create more unemployment. We should reintroduce e-visas to countries that are safe and even to OCI [Overseas Citizenship of India] cardholders,” he said.