Thread by @marginalideas

Impact of lockdown on Aviation

No industry is facing as big a challenge currently as Aviation. India has closed both its international as well as domestic borders till April 15th.

1/n

For Domestic travel, yield has declined to 12-15%, forward bookings declined by ~35%. For international travel, it is expected to be down ~70% yoy for Q1/Q2 – 25% of all international travellers are foreigners and they are expected to be 0 for some time beyond the lockdown.

2/n

With the belly capacity of passenger flights lost, Cargo operations are struggling to meet nominal demand especially for essential goods (food/ pharma). Some of the passenger flights are being operated for Cargo carriage. Forward booking permitted beyond April 15th, for now
3/n

Few Indian Airlines have communicated upto 25% pay cut across organization. Another key issue- Unavailability of Labor in the short term: Labor migration due to Covid 19 would place additional constraints in ability to ramp up quickly when things become better.

4/n

Owing to the severity of travel restrictions and the expected global recession, IATA now estimates that industry passenger revenues could plummet $252 billion or 44% below 2019’s figures.

5/n

Reduced scale of operations would result in rationalization and job losses across the entire value chain of aviation sector airports, ground handling companies, airlines, MROs, travel & booking companies, hospitality, tour operators, lessors etc.

6/n

Estimated 25% reduction in airline staff, ~40% ground handling staff.

Overall, the whole value chain is a high default risk area.

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