The CoronaVirus Disease 2019 (COVID-19), was first detected in December 2019 in the city of Wuhan, the capital of Hubei province of China. Since then, the virus has spread rapidly turning into a pandemic that has been raging across the globe with no sign of abatement as yet. India too has been affected badly forcing the government to resort to a nationwide lockdown on March 22, 2020 followed by an extended lockdown for 21 days from March 25 to April 14 and once again up to May 3 this year. As compared with the other types of viruses that have been periodically affecting the nation over the years, the widespread infection by COVID-19 and the rate at which the number of persons affected by this virus is increasing, it does not appear possible to predict as to when this menace will be brought under control and normalcy to life that has been totally disrupted, would be restored. As of now, it appears that even after May 3, if not a total lockdown, the government may be compelled to impose restrictions in areas that have been severely affected by this virus. Such areas have been described as “Hotspots”.

The outbreak of COVID-19 has adversely affected all segments of the global economy which would include farming, travel industry, manufacturing and the complete range of small, large and medium size businesses across the globe. The daily wage earners especially are in complete distress. On account of the near total paralysis in movement by personnel, businesses related to travel has been hit very hard and one of the segments that has suffered a particularly devastating impact is the global aviation industry of which the airline industry is perhaps the worst affected. On account of the cessation of both domestic and international flights, the Indian carriers have had to ground their fleets impacting their source of revenue drastically and have even resorted to terminating services of pilots who had been re-employed on contract after retirement from the airline at the age of 58. While the national carrier has been employed to evacuate personnel to and from India at government expense, the private carriers have not been assigned such responsibility in the prevailing circumstances.

The plight of the Indian airline industry though well known to one and all in the country, has been formally brought to the notice of the Government of India by Alexandre de Juniac, Director General (DG) and the Chief Executive Officer of the International Air Transport Association (IATA). In a personal letter to Prime Minister Narendra Modi.

The DG, IATA has stated that the crisis the Indian airline industry is facing currently, is much worse and far more widespread than that faced by the industry ever before. He goes on to say that “Prior to the outbreak of COVID-19, contribution to the economy by India‘s air transport industry was estimated to be around $35 billion, supporting 6.2 million jobs and contributing 1.5 per cent to the GDP. However, COVID-19 has led to the destruction of air travel demand on an unprecedented scale. Travel restrictions and other measures adopted by governments have made most international air services economically unviable or operationally impossible, resulting in a rapid shrinking of the global air transport network. IATA estimates that COVID-19 could result in a nine per cent loss in passenger volumes and a loss of $2.1 billion in passenger base revenues for the air transport market in India in 2020. The disruptions in air travel on account of COVID-19, could well affect about 5,75,000 jobs and $3.2 billion in GDP that are supported by the air transport industry in India.”

The DG, IATA believes that the airlines in India especially those in the private sector, are currently in a grave and immediate danger of insolvency that could lead to total collapse, depriving the Indian economy of the significant contributions that the airline industry makes. This would be a complete disaster as it would deprive the nation of a safe, efficient and viable commercial air transport facility that provides connectivity both within the country and abroad. While the airline industry is adopting every possible measure to mitigate the impact of COVID-19, in the prevailing circumstances, their options are extremely limited. To alleviate the problems for the Indian airline industry, the DG, IATA has requested Prime Minister Modi for direct financial support temporarily to compensate for reduced revenues and liquidity attributable to travel restrictions imposed as a result of COVID-19. The financial support by the government could be by way of loans from banks or support from the corporate bond market, both with appropriate guarantee by the government, waiver of airport charges, taxes on air fares and other government-imposed levies, temporary waiver or reduction of excise duty on Aviation Turbine Fuel (ATF) and credit to airlines for purchase of ATF.

There is no doubt that on account of COVID-19, the Indian airline industry today is facing an unprecedented disaster. Unless the Government of India steps in and extends timely and unmitigated financial support as opined by the DG, IATA, the Indian airline industry may find it difficult to survive.