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NEW DELHI :
Indian airlines with liquidity problems have reopened reservations for domestic flights since May 16, despite the fact that the government has not decided when to lift a flight suspension of more than a month.
No-frills airlines GoAir and SpiceJet Ltd have begun accepting reservations for travel between major sectors beginning May 16. Others like Vistara, AirAsia India and IndiGo have resumed booking tickets for flights from June 1.
This occurs a week after the Directorate General of Civil Aviation (DGCA) stopped airlines to sell tickets, even as the nationwide blockade to prevent the spread of covid-19 was still in effect. The regulator told airlines to suspend those reservations until further instructions were received as the pandemic continued to spread.
Airlines were also told to refund full fares to those who booked tickets during the first closing from March 25 to April 14 to travel between March 25 and May 3, but were unable to travel due to the closure.
Spokespersons for IndiGo, SpiceJet, GoAir, Vistara and AirAsia India did not respond to Mint’s questions.
Air India Ltd, however, has refrained from reopening its reservations, a spokesperson for the national airline said.
A DGCA spokesperson declined to comment.
Airlines are offering attractive fares to attract customers on their flights starting next month. SpiceJet is selling a one-way ticket on May 16 from New Delhi to Mumbai for just ₹2,500, while a flight from Bangalore to New Delhi costs GoAir ₹3,164.
The resumption of reserves reflects the precarious financial situation of the Indian aviation sector. All airlines urgently need cash, as the unprecedented blockade has forced the grounding of hundreds of planes. India’s aviation sector, including airlines, airport companies, groundhandling companies and airport retailers, is expected to post losses of $ 3-3.6 billion in the June quarter due to the covid-19 pandemic, according to aviation consultant Capa India.
Since the government, unlike some of its global peers, has yet to show its inclination to bail out the aviation industry, airlines are taking their own steps to generate revenue, a senior airline official said, seeking the anonymity.
“The airlines are doing everything necessary to survive,” said the official.
However, airlines have been criticized by the government and people for taking reservations and blocking people’s money during the shutdown period. In most cases, the money is not refunded, and airlines create a “credit deposit” for customers and agents to make new reservations within a specified time frame.
Airlines’ desperation to generate revenue is also hurting online and offline travel agents.
In this sense, all travel agencies have to deposit money (in online wallets) with airlines like IndiGo, SpiceJet, GoAir and AirAsia India in advance to book tickets.
Travel agents can book worthwhile tickets in their wallets. However, at the time of the refunds, the airlines do not transfer the funds to the agents’ bank accounts directly, but instead load the amounts of the refunds into wallets that could be used for reservations later.
This occurs after on April 16, the civil aviation ministry ordered airlines to refund full fares, without imposing cancellation charges, to those who booked tickets during the first closing from March 25 to April 14 to travel between on March 25 and May 3.
“The fact is, refunds are loaded into the wallet (and not cash),” said Nishant Pitti, co-founder of EaseMyTrip.
With the DGCA ordering airlines not to start booking until further notice, such wallet balances are increasing as more people opt for full refunds. “Travel agent money is locked until we start getting new bookings,” Pitti said, adding that he has no choice but to initiate refunds of his own cash flow.
