Air travel likely to stay in low swoop in 2021; timid recovery predicted

Demand and recovery for international traffic will touch only 35 to 40 per cent of that in the financial year 2020 while the same for domestic traffic will reach 70-80 per cent (of financial year 2020), aviation consultant Centre for Asia Pacific Aviation (CAPA) has predicted.

Stating that the demand and recovery will still remain uncertain in 2021 for international traffic, CAPA said discretionary domestic level segments such as business, international, MICE (meetings, incentives, conferencing, exhibitions), and leisure which accounted for 55 per cent of the market in the pre-COVID era may not fully recover until there is widespread vaccination.

The agency said even offers of low fares have been unable to accelerate the demand for discretionary travel.

CAPA also stressed for the need for the Directorate General of Civil Aviation and Bureau of Civil Aviation Security to be “reinvented as professional, independent institutions” which could run from funds generated from industry players and consumers.

“The need to modernise these agencies can no longer be ignored as the entire industry will soon be market-driven. Hiving off and corporatising the air navigation services division of the Airports Authority of India (AAI), in line with global best practice, is another overdue reform that should now be pursued. The AAI requires a new long-term business model given that the largest airports will have been privatized,” CAPA said in the statement.