The aviation industry has been devising ways to survive the COVID crisis. We get a sense of the recovery from industry leader IndiGo.
In his career of close to four decades in the aviation industry, William “Willy” Boulter, chief commercial officer of IndiGo, hasn’t seen a crisis like COVID-19.
During his stints at many top global airlines companies in the past, Boulter has witnessed several major crises. These include the 9/11 terrorist attacks in the US, the Gulf War (1990), the invasion of Iraq (2003), the SARS (Severe Acute Respiratory Syndrome) outbreak (2002), MERS (Middle East Respiratory Syndrome) outbreak (2012), and the Zika outbreak in Brazil (2015).
Boulter joined IndiGo in 2018 and has had stints at airlines companies like Etihad Airlines, Gulf Air, Virgin Atlantic and Cathay Pacific in the past.
He tells afaqs! that unlike Coronavirus, all of these were localised in nature and had a short-term impact.
The aviation industry has been amongst the worst affected. The (Coronavirus) pandemic put a two-month-long pause on passenger travel, plugged international flights and had a negative travel sentiment among consumers. The ripples also rocked several other businesses associated with travel. “We’ve never seen something of this scale,” he says.
The Indian government allowed airline companies to resume domestic flights in a phased manner from May 25. The Directorate General of Civil Aviation (DGCA) reported that 52.71 lakh passengers travelled within the country in October.
While the growth is significant, from the 39.43 lakh flights in September, it was 57.2 per cent lower than October 2019. IndiGo accounted for the largest share (55.5 per cent) of the domestic traffic. The growth was driven by factors like the festive season.
Post the initial suspension of international passenger flights (March 23), the DGCA extended it till November 30. Apart from the government’s rescue program Vande Bharat Mission, only special flights to countries with 'air bubble' arrangements were permitted. India has air bubble pacts with countries like the US, the UK, France, etc., which make way for special flights to these countries.
“We had this couple of months where we did not have any substantial passenger operations. We did flights for the government and got into cargo flights during that period. We were flying medical supplies, PPE kits, pharmaceuticals, etc., across the country. We moved quite a bit of cargo, both internationally and within the country,” Boulter says.
With a dip in passenger revenue, attempts were made to reduce fixed costs. The company also had to reduce some of its workforce. IndiGo has currently resumed around 70 per cent of its domestic operations and is looking at an upward path. It recently crossed the 1,000 daily flights a day mark (from the pre-COVID frequency of 1,500).
"In terms of passengers, we’ve been surprised by the demand."
While business-oriented travel is yet to recover, Boulter mentions that there is a healthy demand for leisure travel. “In terms of passengers, we’ve been surprised by the demand. Flights to Maldives from Mumbai are doing really well. There are other such examples of normal demand returning. The SME sector is also recovering gradually and we are seeing people doing business across India again.”
He, however, mentions that in comparison to other global markets, the aviation industry in India is recovering faster due to its large domestic travel base. “India is relatively buoyant because of the large domestic market. It was in a good position and was growing fast pre-COVID.”
"India is relatively buoyant because of the large domestic market."
Also, there were two major travel trends that emerged during the ‘unlock’ phase. First, it was the reverse migration, with people moving back to smaller towns from cities. And then, leisure travellers were looking for destinations closer to home and accessible by a car.
Speaking on the former, Boulter reveals that once IndiGo resumed operations, flights from cities like Mumbai were occupied only one-way to a number of destinations. “They were quite full in one direction and not so much on the other. The difference has evened out in the past two months. We are seeing a rebirth of conventional travel in India.”
On the trend of travellers looking for nearby destinations, he says that while folks mostly from the NCR (National Capital Region) were visiting nearby destinations in cars, it didn’t mean that flights were flying empty.
"We have seen the Mumbai-Male leisure demand."
“We have seen the Mumbai-Male leisure demand. We are seeing some leisure traffic in Dubai too. There was pent-up demand for leisure travel.” To cater to the interest in travelling to Maldives, IndiGo will be now adding (new) Bengaluru-Male, and Delhi-Male flights.
In mid-July, IndiGo unveiled its ‘Lean, clean flying machine’ campaign to assure consumers of the hygiene and safety standards maintained in its flight. Crafted by Wieden+Kennedy, the brand’s communication highlighted safety measures like frequent disinfection of high contact surfaces, zero contact boarding and the use of HEPA filters (that kill germs) in the aircraft’s ventilation system.
"There are still a lot of Indians who are wondering whether to travel."
“There are still a lot of Indians who are wondering whether to travel. Our message to them is, ‘it is time.’ The number of web check-ins have gone up as a result of these efforts to reduce contact. The share of contactless web check-ins has increased to 80 per cent from 30 per cent (earlier). There are a whole lot of other features that we are working on to reinstate that confidence to travel,” says Boulter.
To make up for the dip in passengers, IndiGo is building its cargo business, alongside bolstering its charter services. The brand even introduced a ‘Wedding Charter’ for destination weddings.
“There was always some demand, but due to COVID, families wanted to travel together, but within the charter facility. We see it (charter) expanding even after the COVID crisis.”
Speaking about IndiGo’s new cargo business, Boulter mentions that there has also been a major shift in cargo freight globally. About half of the world’s cargo would move in the belly of passenger aircraft and the other half would move in the cargo freighters. With the dip in passenger travel, the share of cargo that travelled in passenger aircraft has reduced significantly.
He reveals that many airlines will be repurposing passenger aircraft to carry cargo in the cabin after necessary certifications. “We did it pretty quickly, since we did not have a cargo fleet. We used our (Airbus) A320 and A321 aircraft to carry cargo in the cabin. About 10 of our aircraft are equipped and they needed minor changes in the cabins. The cargo revenue has grown 20 per cent in the last quarter, even though our fleet was flying at 50 per cent of last year,” Boulter says.
"We are optimistic that the worst is behind us."
Speaking about the positive impact of the festive season on the demand, he adds, “It is very hard to compare this festive season with the last (2019), but it has been up to our expectations. We are optimistic that the worst is behind us.”