Airlines caught unawares as India allows local flights to resume

[NEW DELHI] India's decision to resume domestic flights from May 25 was a bolt out of the blue for most of the country's aviation companies.

Top executives at three Indian airlines said they learned about the move when the aviation minister tweeted it. The executives asked not to be identified citing rules on speaking to the media.

Most airlines have suspended ticket sales at least until June 1 and were staring at a longer stint on the ground, until the minister announced the government's plan to reopen the skies. Many are puzzled as the lifting coincides with India emerging as a nation where coronavirus infections are spreading at the fastest pace in Asia.

While airlines, strapped for cash due to the shutdown, were waiting for a decision, the short notice makes it harder for them to prepare for operations, deploy staff, arrange for protective gear, and ensure the virus stays away from flights, the people said.

The issue shows the challenge airlines face as the world gradually opens up the skies even as new virus hotspots emerge. The situation is particularly alarming in crowded India, where movement of people from its mega cities to the hinterland has already catalysed the virus's spread despite a near two-month nationwide lockdown.

Airlines around the world have struggled to remain in business, with some shutting down, as travel restrictions dried cash flows. The ban on local flights - which came into effect on March 25, just days after a ban international operations - prompted industry analysts at Capa Centre for Aviation to speculate that struggling airlines would have to sell shares to stay alive.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

India's airlines, including InterGlobe Aviation's IndiGo, Asia's biggest budget carrier by market value, SpiceJet, Singapore Airlines' affiliate Vistara and AirAsia Group, have 650 planes between them in their fleet. The country is one of the biggest market for Airbus and Boeing.

Infections in the nation of 1.3 billion people were at 112,028, including 3,434 deaths, as at Thursday morning, according to data from Johns Hopkins University.

BLOOMBERG