The pandemic has hit the India’s aviation industry hard in decades as it battles with a broken pricing model and a domestic slump.
“I have sold my house and moved into a small apartment because I could no longer afford to pay my home loan,” says a former pilot who wishes to remain anonymous. The 38-year old, a former state-sponsored Air India staffer said, he and his relatives were consistently harassed by the bank when he began defaulting on his payments.
“Bankers even came to my house and it was embarrassing for me. So, I gave up my house in a distress sale. It was heartbreaking.”
Before the arrival and rise of COVID-19 pandemic, flying for Air India was considered a lucrative career. The senior pilots were earning up to 10mn rupees in 2011 which at present exchange rate becomes more than $135,000. However, the country’s national airline has now landed the bankruptcy. Truly in choppy waters in the aftermath of corona, the flagship carrier was already looking for a buyer for a number of years. But the chances in the post-corona world are from zero to none, reportedly pushing the government to even consider waving of the airlines $3.3bn debt if a deal could be inked.
Air India however, is not the only one to be rescued from sink. Seven airlines including India’s oldest private carrier Jet Airways became dysfunctional in the last decade. And now the remnants of once a floundering industry in India are on the verge of crash. Roaring COVID-19 and multitude of other factors including hiked fuel prices, heavy taxes, low demand and ruthless competition are the reason why the business that let people fly around is nearing the ground.
The grounding of the Boeing’s 737 Max aircraft and Airbus’s persistent troubles with Pratt & Whitney engines in 2019 also took a toll on the airlines. Although lower aviation fuel prices came for a respite but everything was reversed with the unleashing of Corona.
India currently has eight carriers with Indigo leading the aviation market. The pandemic has dealt a blow to the already struggling industry and the biggest challenge experts say is the dramatic decline in passenger traffic. Although the strict nationwide lockdown restrictions have been lifted after over two months, far fewer people are willing to fly are international traffic is in a chokehold.
The cash-strapped airlines between May and Sep 2020 saw a nominal passenger traffic of 11mn down from a flow of 70mn during the same period last year, according to ICRA. Trends are expected to remain same in 2021.
Air India alone has laid off 48 pilots this year and others airlines have scaled down a big part of their human resource notwithstanding the losses. A number of pilots are on leaves without pay or have seen a 30% cut in salaries, says Parveen Keerthi, general secretary of Indian Commercial Pilots’ Association. According to International Air Transport Association, the country could see 3mn job losses in aviation sector and its allies such as airport services, hoteling, cargo services and others.
“It’s the only option left,” says Urvashi Jagasheth, a research analyst at Care Ratings. “The only cost which can be adjusted or tapered is salaries.”
“It’s mentally very challenging to work in such uncertain times,” says Amalendu Pathak, a pilot for a private airline. “But we have to keep working. I used to earn in millions and now I am earning $81 per hour. I have a family to feed. My savings are running out.”
Not different is the story of Ritika Srivastava, 34 who worked as an accounts-division employee of a private airline. She resigned form her job to attain a similar role at a private airport company but lost both jobs because of COVID-19.
“They said they would call back once things normalize. It looks difficult now.”
“We couldn’t afford to live in Delhi. Our savings dried up. My husband is not getting paid in full either. He only gets 30% of his salary,” Ms. Srivastava says.
“I have been hunting for a job for seven months. Wherever I go, they tell me that I only have experience in the aviation sector. But I have a background in finance too.”