Learning to Live with CoViD19: How Indian Airlines Can Move To Profitability?
Indian domestic air travel will start two months after it was closed on March 25. Most domestic airlines, which were already having challenge staying afloat was dealt with almost a knockout blow. Since air-travel employs a large number of people and helps business fly (pun intended), all stakeholders should think about how to make the airlines financially viable.
Thus, India must think innovation while leveraging the best practices International airlines are using.
Social Distancing @ A Cost: Globally, most airlines will follow middle-sit-empty model, when there is space in the plane. India can offer SD@Cost. This will work as follow: The first 5 rows will follow middle-seat-empty model. To make up for this revenue loss, the price of middle seat will be added equally to two seats. This will increase the cost of such social distance seat by 50%. For a passenger looking to have the safety of middle-sit-empty, this is a great deal. For the airline, there are two advantages: its offering middle-sit-empty model at no loss, but really this paid empty seat actually is causing extra demand in otherwise uncertain world.
Pickup & Drop @Door: Most passengers will look for clean cars and drivers tested for covid. Airlines will have to test their pilots and rest of the staff on daily basis to ensure that their whole staff does not get quarantine. A tested and clean car can easily go for twice the normal Ola rental.
Co-offering Prepared Food Before Boarding: For longer flights, food can be offered before boarding. Of course, like earlier, the food will be priced at a bit premium.
For government, here are some things to consider:
Learning from the Bangalore train fiasco, where people were asked to go through 14-days Hotel quarantine, there should be NO QUARANTINE at the destination. Just think about it- someone flying to business to Delhi for 3 days, how can he or she be quarantined for 14 days. Destination airports can do a test if needed and do quarantine if someone test positive.
Kudos for government to put a price control in place. But same should be the case for creating Minimum Price. This will be the key to ensure mindless pricing competition does not derail the airline profitability.
While for a week or two, there will be rush for airlines given its 2 month lockup, international travellers will act as a major feeder to domestic airlines. With this in mind, DGCA should look to open International Travel starting June 1st.
We all have to realize that airlines in India not only create direct and indirect jobs, but also must become financially viable, if our economy has to take off. Of course, meaningless price wars have made airlines’ balance sheets weak.
With starting domestic airlines on May 25th, with a comprehensive SoP, DGCA and Ministry of Civil Aviation, have shown courage through care. It’s time to continue that calibrated approach to start International Flights once the kinks in domestic flights are worked out. Note that most European and Asian airlines are starting their short routes (< 5 hours) this week. International operations are planned to start around the first week of June and then scaling by June 15.
Thus the international flights are the need of the time. Once the domestic flight operations are set within a week, the international flights must start to ensure Indian Businesses survive.