After a turbulent 2020, revival won’t be easy for aviation firms in new year
While the pandemic has hit businesses hard, the aviation sector was among the worst hit in 2020 globally. In India, air travel was restricted when the covid-19 lockdown was imposed in March. This was followed by a gradual easing of operations from the end of May.
As we enter the new year, it goes without saying that how demand pans out would be crucial. Here, there has been a reasonable improvement in domestic passenger traffic from the nadir, though it is uncertain whether the momentum would be sustained. Varun Ginodia, an analyst at Ambit Capital Pvt. Ltd, said, “While the recovery in domestic traffic has been encouraging, it’s worth noting that the average daily passenger run-rate has started to moderate this month. Going ahead, it is possible that the recovery may turn more topsy-turvy, as seen in Europe and the US.”
He added, “As such, the recovery in domestic passenger traffic to pre-covid levels (FY20) could be prolonged.” Plus, corporate travel is not expected to return in a hurry with work-from-home becoming a more prevalent trend.
