Wheels up! Corporate India is flying again as vaccination picks up
Corporate travel is on the mend, as the second Covid-19 wave ebbs and the higher pace of vaccinations bring renewed vigour to business interactions and meetings.
Charter flights are leading the rebound, with India Inc preferring these due to the safety factor.
“The recovery in corporate travel that took place in July-December after the first wave has happened between July and August (this year). Of course, we haven’t reached pre-pandemic levels, but we will,” said Rakshit Desai, India managing director of FCM Travel, a corporate travel company.
For IndiGo, the country’s biggest carrier by market share, corporate travel has reached 35% of pre-pandemic levels and will soon touch 50%, said a person in the know.
Corporate travel had gathered steam in February but soon plunged to 10% of 2019 levels during the second wave of the pandemic.
The impact of the second wave on businesses has been milder than last year, when a complete lockdown brought many industries to a standstill and shrank the economy.
Aviation was particularly impacted, with airlines expected to post over $8 billion in combined losses for FY21 and FY22.
About 59% of those surveyed in a July poll of 118 top corporations by the Confederation of Indian Industry said the impact of the second wave would be milder than the first.
IndiGo and other carriers have been focussing on charter flights, especially to international destinations. It has been operating charter flights to countries in the Commonwealth of Independent States region.
The airline’s “short-term focus is on increasing the capacity deployed through air bubble arrangements and charters,”
chief executive Ronojoy Dutta said in its most recent post-earnings conference. InterGlobe Aviation operates the IndiGo brand airlines.
Airlines charge Rs 4.75 lakh to Rs 5 lakh per hour for a 180-seater Airbus A320 or Boeing 737 flight.
For the smaller ATR-72 turboprops and Q400 jets, they charge Rs 3 lakh to Rs 3.25 lakh per hour, an industry source said.
Private operators with an aircraft seating capacity of between 10 and 13 seats charge about Rs 3.65 lakh-Rs 3.75 lakh for an hour’s flying time.
All these rates are exclusive of GST.
Charter bookings this year have been at an all-time high, Desai of FCM Travel said.
The number of charter bookings that FCM has facilitated in the last three months is higher than what it did last year overall, he added.
Demand for private jet operators is also at a record high.
“We have recently flown private inpiduals travelling with their families and pets in business jets to avoid using the congested airline aircraft and airport terminals. We believe that this trend will continue as it is more of a safety concern than luxury to fly privately,” said Atiesh Mishra, the founder of private aviation solutions company AJM Jet Management.
Dubai-based charter operators have been in demand for India’s rich and wealthy.
Empire Aircraft Management Services has seen a 50% increase in aircraft charter bookings from Indian clients in 2021 compared to pre-Covid (2019) levels, said Nirav Kotak, the country head of the Dubai-based company, which is part of the Empire Aviation Group.
“We are very optimistic about the prospects for the business aviation market in India, especially as more companies expand their operations domestically and internationally, and India currently represents a significant and growing part of our charter business,” he added.