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COVID 19 Hits Aviation Industry

The COVID 19 virus has impacted and devastated the economy creating immense financial losses and significant uncertainties. Governments of most countries around the globe are still enforcing migration controls, closing of borders, and also imposing people lockdown and home-quarantine measures so that the health care system can be toughened up to contain the pandemic.
The aviation industry is among one of the most severely affected. As per International Civil Aviation Organisation (ICAO), in four months i.e. from February to May, a loss of $118 billion has been borne by air carriers, $36 billion dollars by the regions of airports (domestic and international) and $4 billion by air navigation service providers globally.

Airline companies started suspending flights to China from February in the wake of coronavirus outbreak and Nepal took the decision to suspend all flights from March 22. Initially the suspension was till March 31 but has since been extended. During this time, only repatriation and cargo flights – domestic and international – have been conducted.

B360 spoke to some of the country’s leading aviation professionals – both domestic and international – to understand the impact of COVID 19 on their operations and Nepal’s preparedness to resume flights in the new normal.

ABDULLAH TUNCER KECECI
General Manager Nepal, Turkish Airlines

How has the Covid 19 pandemic and lockdown situation affected your airline?

Covid 19 pandemic affected the airline industry very deeply. Of course it affected our operations. In pandemic conditions, you cannot just think about your operation, you have to think about the health condition of passengers and employees more than anything. We are working with the Health Ministry of Turkey very closely. We stopped our operations from March 26 to June 1 all around the world. On June 1, we started operating domestic flights and after June 10 we started our international operation as per the compliances of the countries bilaterally.

Is Turkish Airlines prepared to resume flights taking all precautionary measures and necessary social distancing guidelines or should the travel ban still be imposed since the number of Covid 19 affected are increasing in Nepal?

We have to learn to live with existing conditions. Of course, all details have to be discussed since human health is our first priority. We don’t look for short term operation. We are working for a continuous operation with precautions. All the risks have to be minimised. All the needful measures have to be taken and at the same time we need to continue our lives.

What are your views on the social distancing SOP issued by CCMC, CAAN and TIA? Would Turkish Airlines want to take additional safety measures?

I can see there are works being done in Nepal by associated officials. Officially the standards of the airport and authority in Nepal and our company standards have to be considered together to make safe operations. We are sharing our standards both ways and trying to reach a better standard altogether. There is close contact between the authorities and airlines for that.

Is being allowed to carry just 40-50% passengers of total capacity a possible solution?

There is already international standards advised by IATA and concerned authorities for international flights. Half passengers on a flight does not look like a solution and a feasible method for anyone. Precautions for normalised operation seem more adoptable. Both commercial side of operations and health measurements have to be considered together.

What are the financial implications on your airline?

Turkish Airlines is the flag carrier of Turkish Republic. We are a strong airline. We have the largest network in the world flown by our airlines. It’s true that every airline is facing financial difficulty but at the same time they are all trying to manage the situation. They are taking some financial precautions accordingly and we are also doing the same. We are making all plans to resume flights as soon as possible in all our destinations. Air travel is a need for people and we already started continuing our services with many destinations with health and safety measurements. Everybody has to learn how to live with the existing conditions so let’s talk about a better future.

Are there any relief packages being offered by governments to airline companies?

There are many relief packages in many countries. Airlines flying from one destination to another are giving the opportunity to country to be in close contact with the rest of the world for business, leisure, visits and many other reasons to travel. We appreciate the support in these times. Countries have announced airport costs, fuel, handling costs, etc. being reduced till the end of year to encourage airlines to start flying to their destinations. They have also announced some relief packages for the employees of airlines. They announced some tax exemptions for some period. This is a difficult period and everybody in the industry must support each other to come back strongly soon. Tourism industry has to be kept strong. Tourism is a must for Nepal. I believe there is a huge potential in Nepal. Our plans have to be ready for the future and for that we need to support each other. If any hotelier, restaurant owner, guide, handicraft worker has to close their business or aren’t able to sell their products because of the current situation, I and everyone should feel the pain. Then the industry together will be strong. We can increase the examples. We must motivate ourselves for better future together by supporting and understanding each other more.

MANJANI D. SHRESTHA
Marketing Chief – Sales and Marketing Summit Air

How has the Covid 19 pandemic and lockdown situation affected your airline?

We all are aware how badly Covid 19 is affecting everyone globally. This deadly outbreak has affected all sectors of society. Manufacturing industries, agriculture, health, education but the most affected sector being tourism, Covid 19 impact on aviation sector is severely decimating. The tourism industry broadly includes travel, trekking, rafting, hotel, airlines but many more other informal sectors also support the value chain the industry has.

Is Summit Air prepared to resume flights taking all precautionary measures and necessary social distancing guidelines or should the travel ban still be imposed since the number of Covid 19 affected are increasing in Nepal?

We are ready to operate flights taking all necessary precautions imposed by the CAAN. Before opening the flights for commercial operation, we have been operating repatriation flights for three major sectors like Humla, Dolpo and Lukla where surface transport is hard to get. These flights have been operating for those local peoples who were stranded in Kathmandu due to the lockdown since from March 23. While operating these flights, we have been already following the SOP imposed by CAAN.

What are your views on the social distancing SOP issued by CCMC, CAAN and TIA? Would Summit want to take additional safety measures?

Social distancing SOP issued by CAAN, TIA would be very effective and praise worthy if only we could actually implement that rule. We are afraid we can hardly stick to that rule after the flights are opened for general public and we will have the departure lounges and check-in counters filled with passengers. Implementing the system of filling the form of Passenger Locator Form is very difficult and time consuming for both airlines and passengers. Storing the filled form in long run will not be possible so the form should be developed in digital format. For safety measures, as imposed by CAAN we are also implementing the same guidelines for passenger i.e. compulsory mask, hand sanitizer, no hand baggage, disinfection of the aircrafts and the ramp buses after every flights. We are taking care of our staff both in airport and office. Before joining duty everyone needs to go through temperature check and hand sanitizing. Wearing a mask is compulsory.

Is being allowed to carry just 40-50% passengers of total capacity a possible solution?

Requiring social distancing in the aviation sector is also a serious issue. Carrying just 40-50% will mean closing down. Most STOL operators have seat capacity of 16/17 persons only. Maintaining the occupancy of 40-50% on social distance guidelines is impossible to sustain. To solve this problem, all operators have forwarded the same SOP. For the STOL operators, 80% of revenue is generated from tourism, and because of Covid 19, the tourist arrival will be completely zero. The affect this will have on our business is unimaginable. To solve this problem, we will need to increase the fare or to get a subsidy from the government.

There are mainly two tourist seasons; spring and autumn. At the beginning of spring season, because of the coronavirus pandemic, the whole tourism season was completely destroyed. Being an airlines professional from STOL operations, I must say, among the three aircraft operators, the helicopter companies have been impacted badly followed by the STOL operators and then the trunk operators. All operators are bound to reduce their operation because of the lack of business for fully fledged operations. Most of the operators are planning to operate only 50% of their operation approximately for six months once the lock down is removed. This will reduce flights, revenue, and definitely reduce jobs.

Are there any relief packages being offered by governments to airline companies?

Government has announced some relief packages in its recent budget announcements which includes providing loan at concessional interest rate of 5%. Similarly the Central Bank has issued a draft of refinance procedure targeting the corona affected sector. This will somehow provide relief but not enough for tourism to overcome this crisis. CAAN has given some waiver in landing and parking fees. Company is bearing big losses but there is no situation of bankruptcy at present. Company can sustain up to six months to a year by opting for a cost cut down method and if debtors’ recovery can be done as planned.

We can assume that there is very less possibility of tourist arrival from Western countries for another one year. To revive in this crisis period, the government is promoting domestic tourism but domestic airlines won’t be able to survive from domestic fare only. Therefore, government subsidy is essential for the promotion of domestic tourism as well.

RUPESH JOSHI
Director – Marketing, Sales and Ground Handling
Buddha Air

How has the Covid 19 pandemic and lockdown situation affected your airline?

We have been conducting zero commercial flights from March 24 so there is zero revenue in the company although we have been conducting some international chartered flights. Buddha Air is bearing a loss of Rs 90 million per month which is why the staff is getting paid 50% of their normal salary. There have been talks to start normal flight operation from August 1 and we are hopeful that it will happen.

Is Buddha Air prepared to resume flights taking all precautionary measures and necessary social distancing guidelines or should the travel ban still be imposed since the number of Covid 19 affected are increasing in Nepal?

Yes, we are. Buddha Air conducted a trail on June 25 to operate domestic flights which was attended by pilots and officials of Buddha Air. In the trail, we presented all preventive actions against Covid 19 such as measuring temperature of the passengers at the airport entrance, sanitising the passengers and the aircraft, maintaining physical distancing in vehicles used within the airport to reach the aircraft, etc. All the officials involved in the trial flight were made to wear masks and were prohibited to use the airport toilet along with keeping the safety of the pilot, crew members and airport officials in mind.

Regarding elongating the travel ban, I don’t think it is a good idea. The concerned authorities should learn from other countries the measures they have taken to control the spread of the virus and also allowing travelling to continue simultaneously. There is always a way, we just need to discover, plan and imply.

What are your views on the social distancing SOP issued by CCMC, CAAN and TIA? Would Turkish Airlines want to take additional safety measures?

The SOP issued by the CCMC, CAAN and TIA is based on World Health Organisation’s and International Air Transport Association’s SOP to provide necessary safety measures and precautions at the airports and aircrafts. We totally agree with the SOP and have adopted the same in our aircrafts. The SOP includes all the necessary safety measures and I don’t think anything needs to be added though we are researching on what else could be added to our own SOP.

Is being allowed to carry just 40-50% passengers of total capacity a possible solution?

Operating flights at just 40-50% is impossible and such will not even cover our operating cost. If any incentives from the government like government paying for the empty seats, price cut in fuel charges, etc are done, then it might be possible to some extent.

What are the financial implications on your airline?

Since Buddha Air is a 22 year old company, we have been in profit for 20 years and we incurred loss only due to the pandemic. So financially Buddha Air is good and not on the verge of bankruptcy.

Are there any relief packages being offered by governments to airline companies?

The government has issued relief packages for the aviation industry which includes reduction of loan interest rates from the banks, free parking and so on. But the interest rate thing also depends upon the banks because the government has given freedom to the banks to charge or not charge the interest amount. There can be additional relief packages that the government can announce; for example: deduction in fuel charge.

BINOD SAPKOTA
CEO, IME Travels, GSA of SalamAir

How has the Covid 19 pandemic and lockdown situation affected your airline?

Covid 19 pandemic is by far the most dreadful catastrophe in aviation world and the lockdown is creating ripple effects. Airlines have insurmountable monetary loss. Besides, thousands of employees have lost their jobs.The situation is very grave. But we are hoping that it will be recovering very soon and will be normalising because in this 21st century people can’t stay in one place for long so it will definitely revive very soon.

Is SalamAir prepared to resume flights taking all precautionary measures and necessary social distancing guidelines or should the travel ban still be imposed since the number of Covid 19 affected are increasing in Nepal?

Yes, SalamAir is ready to resume flights to Kathmandu once the travel ban is lifted in Nepal and other countries. SalamAir is capable of handling necessary measures as required by the respective country’s law.

What are your views on the social distancing SOP issued by CCMC, CAAN and TIA? Would SalamAir want to take additional safety measures?

The SOP issued by the concerned authorities does include all the precautionary measures that need to be adopted during the current situation. But the SOP should be created and revamped as per the requirement of situation.

Is being allowed to carry just 40-50% passengers of total capacity a possible solution?

Just carrying 40-50% passengers is not a good solution to sustain in business. If coronavirus is to spread, it can spread to entire passengers and it will reach their family too. Though there is a saying “something is better than nothing”, I would like to recommend our government to open all airlines with maintaining the social distance followed by WHO and respective government rules.

What are the financial implications on your airline?

SalamAir is capable of handling this disaster. It is a moderate size budget airline funded by the Government of Oman so there is no sign of bankruptcy.

Are there any relief packages being offered by governments to airline companies?

Regarding relief package offered by the government, it is not clear yet. I think homework on this is going on. Our request with regulatory body is to reduce landing, parking  and others charges of civil aviation,  ground handling charge of NAC, fuel charge of NOC it gives some relief to airlines.

ARCHANA KHADKA
Director – Corporate Department and Spokesperson, Nepal Airlines Corporation

How has the Covid 19 pandemic and lockdown situation affected your airline?

Covid 19 pandemic has hit the aviation sector hard round the globe and Nepal Airlines is no exception. However we have been continuously operating cargo charter, passenger charter and repatriation flights as and when needed.

Is NAC prepared to resume flights taking all precautionary measures and necessary social distancing guidelines or should the travel ban still be imposed since the number of Covid 19 affected are increasing in Nepal?

We are ready to operate flights taking all precautionary measures as suggested by the WHO. In my view, operations of flights with proper precaution should be allowed in order to stimulate the economy.

What are your views on the social distancing SOP issued by CCMC, CAAN and TIA? Would Summit want to take additional safety measures?

It’s indeed good effort by CCMC, CAAN and TIA. Our organisation is working on its own Covid 19 SOP manual which is under process of authorisation.

Is being allowed to carry just 40-50% passengers of total capacity a possible solution?

Discussion around operating domestic operations with certain guidelines is going on. It will be finalised soon.

Are there any relief packages being offered by governments to airline companies?

Government has already brought some sort of package in terms of subsidy in parking charges. However we are hopeful of getting comprehensive relief package that can address the loss we had to bear because of non operation of schedule flights.

Dibesh Dangol is a business reporter for Business 360 covering markets. Before joining Business 360 in 2018, he worked at ECS Media covering events, entertainment, auto and gadgets for four and a half years. Dangol is also involved with Alpha Riding Gears and Made by Aama (MBA).

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