Aviation recovery to be delayed as govt extends 60% cap on flight capacity

The government has extended the cap on airline capacity of 60 per cent up to February 24 despite an improvement in demand and airline executives calling for more flights to be permitted during the festive season.

In a communication to airlines today, the Ministry of Civil Aviation said airlines will be allowed to operate only 60 per cent capacity till February 24.

“Due to the prevailing Covid situation, airlines will be allowed to operate 60 per cent of their pre Covid capacity,” the government said in a mail to airline CEOs.

Civil aviation minister Hardeep Singh Puri had said two weeks back that the government was contemplating relaxing the cap on capacity utilisation and that airlines may be permitted to operate maximum 75 per cent of their pre-Covid scheduled domestic flights if passenger numbers continue to rise.

“Our internal thinking is that we will watch it for another week or 10 days….If the figures (of passengers travelling) continue to be healthy, we would open domestic civil aviation to 75 per cent of the pre-COVID levels,” Puri had said.

Airline executives have been demanding that the government allow them to operate more flights so that they can take advantage of the increased traffic during the festive season and year end period.

Sources said that all airlines had asked for capacity to be increased. A senior executive of a private airline said that airlines had said increasing the capacity cap will help airlines to manage their network better and cut down losses.

“Actually there is no reason to keep the capacity going because if the demand was weak, I would say keep the capacity because then airline revenues would be stronger. But at this point there really is no reason to keep the caps and we are seeing yields moving up. Our total loads are moving up. So removing the caps would be good for the economy, good for airline travel and it will not hurt our revenue. We are very sure about that,” IndiGo CEO Ronojoy Dutta recently said.

Vistara’s Chief Commercial Officer Vinod Kannan today said that the airline has almost reached the 60 percent capacity and is ready to operate more if the government allows.

A senior government official explained that smaller airports are unable to handle more flights as Covid-19 protocols have increased turnaround time.

“Most of the smaller airports aren’t capable of web check in and turnaround time has increased with social distancing procedures, handle coming in. So they can’t handle more flights immediately,” the official said.

Civil Aviation secretary Pradeep Singh Kharola said that the government is not closed to the idea of increasing flight limits if demand increases. “We are monitoring the situation closely. As demand increases, we will allow more flights,” he said.

Experts said that the government’s decision to increase the cap on capacity will delay recovery of the sector. “The departure count is very close to 60% now of the schedule pre Covid. Continuation of curbs will mean that the airlines will have to continue balancing its fleet and have a financial impact since the entire workforce wont be required, it could take longer for airlines to restore salaries or leave without pay,” Ameya Joshi, founder of aviation blog Network Thoughts said.