There is no denying that the aviation, tourism and hospitality industries have been hit the hardest because of the ongoing pandemic Covid 19. With the suspension of domestic and international flights the three industries have come to a standstill. Aviation and Tourism combined contribute 10 per cent of India’s GDP and employs almost 10+ crore people. With a complete grounding of flights and resulting drying up of revenue, the companies can only stay afloat for a limited time by eating into their reserves. Between all this, the recently announced relief package by the Government has no provisions specifically for them. This has caused huge disappointments to all the stakeholders and millions of employees of these sectors. The industry associations had submitted their requests and expectations to the government, but these have largely not found any place amongst the plethora of measures announced so far.
Delhi based travel conglomerate Bird Group in collaboration with PHD Chamber of Commerce & Industry held the second webinar amongst a series on- ‘Saving Airlines & Allied Industries – Saving Jobs’.
During the webinar where 650+ attendees joined in, key measures that have been taken by the governments worldwide to support and sustain aviation and tourism industries were discussed. Eminent leaders from the industry brainstormed on ways and means by which the industry can continue to remain viable and once again bring the attention of the government to these pertinent questions.
The panel included senior members from international organizations and aviation industry in India including key stakeholders. The panel also deliberated upon the expectations submitted earlier to the government, which could not find a place in the set of measures announced by the government.
Esteemed panelists of the webinar were; Dr Shefali Juneja – India’s Representative, ICAO; Arun Mishra – Regional Director, Asia and Pacific, ICAO; Suman Billa – Director, United Nations World Tourism Organisation; Murali Ramachandran – President Ground Handler’s Association; K Narayan Rao – Group Deputy Managing Director, GMR Group; Dr. Ankur Bhatia, Executive Director, Bird Group; The session was moderated by Vikram Chandra, Former CEO, NDTV & Founder, Editorji Technologies.
Laying stress on immediate need to tackle the situation during the ongoing crisis Radha Bhatia, Chairperson, Bird Group said, “With the commencement of domestic flights from 25th May, there will be some resumption of activity in Aviation, Tourism and all the allied sectors. In order to learn from the best practices being followed around the world for ensuring safety of passengers and staff, Bird Group Leadership Initiative and Tourism Committee of PHD Chamber of Commerce and Industry hosted a webinar with leading experts from International Civil Aviation Organisation, UN World Tourism Organisation and Indian airports as well as ground handlers. Together the geographical reach of the panelits is from Canada to Europe in the West and Asia-Pacific in the East. We hope that the collective wisdom that emerged from the discussion will help us in restoring the confidence of the passengers and customers, thereby reviving the airlines and allied industries, which together employ over 10 Cr people in India directly – with an equally large number indirectly dependent on it.”
Rao today called for immediate SOPs to subsidize airport expenses in order to keep the highly capital intensive operations of airport afloat amid the current economic meltdown. GMR operates New Delhi's IGI and Hyderabad International Airport in India.
Rao also urged the government to ensure the blue collar workers as well as the migrant labour are not rendered unemployment that fills more than half of the workforce employed by airlines, airports and other aviation ancillary services.
He also said that a prompt extension of GST input tax credit on entire airport construction cost is what is most warranted to keep the airport charges low and thereby have a positive cascading effect on ticket prices. While calling for immediate augmentation of revenue from airport and non-airport operations, Mr Rao suggested increase in duty free liquor allowance for boosting non-aero-revenues. He also suggested that non aero revenues can slightly improve earnings by cross subsidization of aero revenues hit by abysmally low passenger and cargo traffic.
Dr Ankur Bhatia, Executive Director, Bird Group laid stress on immediate need to tackle the ongoing crisis and said, “Today we are in the grip of an unprecedented situation. We have no experience in tackling such pandemic induced economic concerns in an industry like aviation. It is an evolving situation, with conditions changing every day. The sector has to be opened up gradually and in a calibrated manner. A limited number of flights have been announced. Though the move will not earn the kind of revenue airlines need to stay afloat, but a start has been made. Now the focus should be on phased escalation of flights in alignment with the SOPs passed by the ministry. International travel will also take cues from experience in domestic travel. It also has to open up as that will infuse more life blood into the succumbing airlines. Futher to this SOPs for Roseate Hotels and Resorts have been implemented with the help of latest technology”.
Ramachandran expressed his concern during the webinar that being a labour intensive and high fixed expenses loaded sector, the Ground Handling industry has been crippled with the situation. There is a need to look at ways to minimize impact on the employment situation. The Government must definitely review the regulatory mindset and environment given the current situation. No revenue, no fiscal support and a highly regulated environment is a devastating cocktail for any industry. He also said that some structural issues that lead to a higher cost base must be reviewed like airport bids, concession framework etc.
Billa commented that the the global tourist flow was contracted during the SARS epidemic in 2004 by 0.4%, the economic slowdown in 2008 by 4% and now there is a possibility of a 58 to 78% contraction. This is clearly a huge challenge for the businesses to overcome. The Governments are equally challenged in the absence of revenue flows and limitations on deficit financing. Most of the stimulus packages across the world are sector agnostic. The industry should carefully assess the existing provisions and propose the changes that are specifically required for the tourism sector.
Mishra said that there has been a serious impact of COVID 19 on Airlines, Airports and industries association with air transport. Government support for revival of aviation industry is critical especially in view of the fact that aviation is a key driver of economy generating 65.5 million jobs worldwide. However when we are looking at support for revival and recovery, the sector as a whole needs to be considered. ICAO’s focus at present is to work with Governments and Industry to develop harmonized guidelines and tools which are universally accepted and applied for early recovery from this pandemic. Public Health corridor initiative is developed by ICAO in close coordination with our various partners like WHO, and Industry organizations like IATA, ACI, CANSO etc. While the full details are available on the website – what it entails is basically a tool for safeguarding public health as we prepare and restart our industry. Specific guidelines are recommended for clean crew, clean aircraft, isolated cockpit, clean airport facilities, arrival clearance and screening etc. We need to have a carefully planned and phased restart of operations giving utmost priority to all aspects of public health for crew, passengers and all the staff as any incidence of virus spread through the aviation system be it aircraft or airports would potentially impact continued operations and lower traveler’s confidence.
Juneja talking about international travel & said that confidence building amongst the travellers shall be crucial to kick off the international travel. She also said that there is a dire need to streamline procedures and protocols which are internationally accepted hence making it easy and comfortable for the travellers to travel.