‘Airlines need government help’

Though that may be the case, at the same time, airlines cannot expect to have government support forever, says John Grant,Chief Analyst, OAG – a global travel data provider with headquarters in the UK. He shares his thoughts on the Indian aviation market as well.

Hazel Jain

Do you vote for quarantine or no quarantine on arrival at international/domestic destinations?

Quarantine is not a solution for me. As an industry, we need to rebuild consumer confidence and take away any doubt around the flight operating, the travel processes, etc. Having that spectre of quarantine on arrival is not going to work in the context of industry scale required. The reason it has worked to date is that people have had to travel for real necessity or equally became trapped and had no option.

Long term, it is not sustainable and we have to find a series of better, more nuanced alternatives.

Are Indian airlines taking the right decisions right now?

Indian airlines have a much more commercial and dynamic operation that allows them to grow as and when they can. When it comes to taking the right decisions, the visibility of data and market sentiment is now difficult for anyone to read with the various lockdowns and restrictions. But I sense from what data I see that they are doing a decent job of balancing capacity to demand.

The risk in India is always over-capacity and airlines adding services too quickly, leading to low fares and then a collapse. We appear to be past that adolescent phase of airlines and if that is the case, then India is as well placed as most to eventually come through COVID-19 and grow onwards.

Airline refunds have been a huge problem in many countries. Your thoughts.

It has been poorly handled by airlines, in many cases who sought to hang onto the cash as long as possible. Having said that, the regulators in many countries probably failed to act quickly and decisively in making sure that airlines refunded cash as was their legal obligation.

The airlines delaying refunds have probably fuelled consumer uncertainty and created a large degree of mistrust in booking a new flight. Would you purchase an air ticket any earlier than necessary to give the airline your cash and then see them cancel and offer you a voucher or refund at some vague date in the future?

What is the role of governments to ensure aviation industry remains airborne?

A tough question this and one that could be the basis of a conference! Different governments have taken different approaches and that in itself is a real long-term issue around state aid, subsidies, etc., and will impact the longer term market.

Two things are for sure: airlines need government support right now and yet at the same time airlines cannot expect to have government support forever. The best outcome for all is perhaps that COVID-19 results in some industry consolidation and relaxation of government rules around overseas ownership of airlines; it has for decades prevented the industry behaving like any other global industry and seeing consolidation of carriers.

Let’s face it – the various airline alliances are really only ways for like-minded carriers to work together because they cannot consolidate their businesses.

Need for creativity

“It is vital as long as it’s not too whacky! There are great examples; the fly as much as you want for the rest of the year promotion in China that is heavily restricted, so not as great an offer as it may seem, or the waiving of penalties for changing reservations.”