Chairman and Managing Director of Spicejet, Ajay Singh spoke to NewsX’s Senior Executive Editor about the measures that can be taken to make flying safe again.
Q. Before we talk of the aviation sector, a quick reaction on Delhi Chief Minister Arvind Kejriwal’s announcement not to ease any restrictions on the lockdown just yet, even though Prime Minister Narendra Modi had said some easing of restrictions would happen.
A. I feel that the Government of India has done a fabulous job in the way they’ve run this whole process. Kudos to them. What they’ve done is being greatly appreciated around the world. I would really not like to second guess what they are doing. So, if the Government of India believes there should be some partial lifting of lockdown post 20 April, if they feel that is safe enough, I would really rather hone into that point of view.
Q. Speaking of great jobs, I want to compliment SpiceJet for its role as a Covid Warrior. You have operated more than 400 flights, carrying more than 4,000 tonnes of cargo, 100 of these were to international destinations. I recall an interview where you said you were carrying cargo on passenger seats.
A. I think this is our responsibility and this is a time when it’s worthwhile to be an airline, when you can actually help. I think we’re just fortunate that we had the opportunity. Wherever we are called upon to help, SpiceJet will always be there.
Q. The airlines are going to be one of the worst-hit by this lockdown. First of all, any clarity on the dates of opening up? There was speculation of May 3, now the Civil Aviation Minister has said no such dates.
A. First, aviation has been the hardest-hit industry. Not only in India, but globally. There’s no doubt about that. It’s a terrible time—the worst ever time for aviation globally. Having said that, in terms of where India is, of course we fully support the government’s decision for lockdown. Things could have been much worse if not for the lockdown. In terms of a date for opening, I don’t think anyone knows the answer to that question. Not the government itself. I think what they’re trying to do is figure out what happens to infection rates with the extension of the lockdown and then they will take a call. Also remember, they need to make a protocol for how exactly flights will be conducted. What precautions are needed to be taken by the passengers, by the airports, and by the airlines. How we can manage relatively contact-less travel, when it does happen. So that’s a process I think the government will probably go through, and discuss with all the stakeholders, before determining a date. So, whether this is May 4 or an extension… it seems to us that there could be an extension beyond May 4 because with the precautions they will take, there are certain changes that will need to be made by the airlines and airports. Do we have enough time? Perhaps this might be extended beyond May 4 by another few days.
Q. One of the suggestions is airlines should fly with one empty seat in the middle. How feasible is it economically?
A. First, it’s not safe. If you think about it, the distance between the aisle seat and the window seat is about 2 feet. The safe distance for preventing COVID infections is 6 feet. So, leaving one seat empty in the middle serves absolutely no purpose. If you look at the two persons who will be on the aisle seats, on both sides of the aisle, that’s a distance of just 1.5 feet. So that’s not really a solution. Face masks are probably a better solution. We will have to look at what is actually effective and not at what is an eyewash, or something that makes people feel happier psychologically. We need to do stuff that is actually efficient. The aviation sector certainly does not want to be the one spreading infections. We will do our very best to propose to the government measures that will help minimise the spread of the infection.
Q. You had a meeting with the Civil Aviation Minister recently. Any measures discussed to get you back in air again?
A. No great discussions so far. What is being looked at is the check-in process—how will that happen? Can there be a more automated process? Can we have a more efficient process for baggage handling? When people stand in rows, how far can they stand from each other? Is there a way to disinfect them? What is it that people need to wear on-board? Is it a facemask and gloves, or is it more than that? Then what we’re looking at is how does the crew behave, what does the crew wear? Do we or don’t we serve meals on-board? Those are the kind of issues that we need to look at. What we do has to be sensible—there’s no point in doing something that looks good on paper but is not actually effective.
Q. India was facing an economic slump even before Covid hit us. This is just going to make things worse. You’ve been talking about reforms in the airlines sector, do you want the government to come in and help?
A. First, I think that India always reforms in a crisis. This is an opportunity for us to look at all the structural problems we’ve had in Indian aviation. For example, trying to get aviation turbine fuel under GST. This is done across the world, and therefore because people get input credit nobody really pays taxes on aviation fuel. In India we are paying 35-40% tax on average, when you count excise and the state VAT. So, this is something that needs to be done— include ATF under GST. This is a relatively easy time to do it. There are ways to do it where the government won’t really lose revenue. The second thing is—look at the way the airports are structured. You give the airport to the highest bidder—the person who agrees to pay the largest revenue share to the Airports Authority of India. When that happens, airports try and maximise the money they get. They then go and say to service providers—people who are providing ground services, baggage handling services, check-in services—that they will give services contracts to those who give them the largest amount of money. The service provider, in turn, goes to the airline and tries to charge the maximum amount of money possible. Because of that, aviation in India becomes more expensive. And increasingly, we have to compete with the likes of Emirates, Etihad, Singapore Airlines— all these regional airlines which have a completely different cost structure. So, this is the time to get our cost structures right if India truly wants to be an aviation power, if India truly wants to set up its own international hubs, and not have to transport our passengers through hubs in the Middle East or in the Far East. I believe this is the best opportunity. In terms of shortterm assistance, countries around the world have looked upon aviation as a strategic sector. You see what the Americans have done: they have provided $50 billion dollars to their airline; $25 million in grants, and $25 million in soft loans. In Germany, Lufthansa has been given a $8 billion package. Singapore Airlines is being provided with a $13 billion package. So, this is a global trend. People are trying to assist the aviation sector, understanding the economic importance and strategic value of it. Of course, India does not have those kinds of resources, but we hope that they will assist us as well and recognise that as the economy picks up, aviation will be a critical claim.
Q. Do you see the prices of tickets going sky high?
A. Fares are a question of demand and supply. There is no question that demand is going to be impacted. It’s likely that no international flights will happen for a period of time. As far as domestic flights are concerned, I think demand could be dampened for a period of time for sure. We do believe that India is one of those markets which will pick up faster than markets globally. India has a great advantage of having a pretty big domestic market. Today, only 3% of Indians fly. Certainly, that number will increase over a period of time. The pace of that growth might slow down for a bit. But India is still going to be one of the most exciting aviation markets in the world.
Q. But do you see habits changing? This work from home culture will ensure that flying to Mumbai for that one meeting and coming back in the evening will stop.
A. Yes, some of that is going to happen for sure. As people understand that some of these meetings can be conducted like we are talking right now (video conferencing). Of course, some of this travel is going to get impacted. But ultimately, humans are social beings. They want to be with each other. If you want to go on a holiday, there’s no way you’re going to get to a beach and enjoy it on a Zoom call. People would rather see each other in meetings. We go to conferences, it isn’t just to attend a meeting. It’s also to meet the people there. It’s also to visit the place where the conference is. So, there is going to be some impact. But we believe that with just a small fraction of Indians flying today, ultimately the Indian aviation market is going to be pretty large. It’s also a great tool to connect two cities. It’s not so easy connecting them through transport such as trains. We think that markets that will be aviation powers in the future are those which have strong domestic markets. Markets like China, India, Indonesia. The time for the dominance of European and American powers in aviation has probably passed.
Q. I read that during the meet between Rajnath Singh and other ministers, the Civil Aviation Minister brought up the issue of parking fees. He said that a lot of costs are building up for you due to parking fees. Are you hoping for a waiver?
A. That certainly should be provided. Planes are just standing at airports and there is a pretty significant parking fee. We’ve seen around the world that what people are doing is taking their planes and parking them at no cost. Let’s say in the desert in Israel or other such places. So, we need to find a way to look after our fixed costs. Today the revenues are zero. There is still some revenue for SpiceJet due to the cargo operations we are undertaking. But broadly, revenues are zero. We have some fixed costs—the lease of our aircrafts, maintenance and parking of our aircrafts, salaries. The greatest pain for airlines today is the fact that their employees are suffering. People don’t have work to do. We are forced to resort to salary cuts and leaves without pay, which is extremely painful. We are very proud that passion is high despite all this and people are being cooperative in the aviation space. But we need to start flying as soon as the medical experts allow us to do so. Meanwhile, we request the Government to share some of the fixed costs of airlines.
Q. During this lockdown, how do you spend your time? Any new skills that you’ve learnt, apart from being adept at Zoom? You were anyway the tech geek.
A. I’ve learnt how to jump on a trampoline with my three-yearold daughter. I’ve learnt how to be a little more patient, with having nothing to do with periods of time. I never thought I’d have to sit at home for so long. I’ve never done it in my life.
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Aviation sector enters rough patch
Local air travel in India is likely to crash from 14 crore domestic passengers in 2019-20 to around 8-9 crore in the next financial year, says a recent report. A coordinated government and industry action is needed if the catastrophe is to be avoided.
With over 70% of the world’s fleet of 24,000 active commercial aircraft in mothballs, it is going to be a heartbreakingly costly effort to get them back in the air. Worse, each passing day only piles on more pressure and makes grounded aircraft less airworthy.
On this bleak canvas painting any scenario is predicated to the passenger mind-set and the thorough brainwashing these past few weeks that has been globally given to the potential flier that getting on a plane is not safe for Covid-19. While at-
tractive ticket costs and piled on privileges might ginger up some enthusiasm, it is not going to be easy.
In the interim as the industry trims its overheads, aircraft and carriers alike are inclined to lie down. It is a fact that half the world’s airlines in most regions only
have two to three months of cash to cover their operations. According to IATA bankruptcy has a hideous grin of anticipation writ large on its face. Granted, there is a wide variation in the fiscal strength of carriers.
The best airlines generate more profits and have stronger balance sheets than they did in the crisis of 2008, but by the same token the rest are the financial walking wounded and pull the industry back. We speak of a coordinated government and industry action that is needed — and needed now — if the catastrophe is to be avoided or at least softened in its impact. Surviving is not enough. Compromising service and safety and cutting corners are all potential recipes for disaster.
Just saying that the ATM (Air Transport Management) community needs to work together to strategies how the airline industry will restart again is also not enough. While it cannot take government fiscal injections for granted, seeking soft loans will be on the cards. Private equity will also have to be considered. It is a cruel fact but downsizing fleet and staff and even airports and assets will be necessary. There is also an official attitude issue.
Each time there is a new government recommendation it is to discourage flying. Demand is drying up in ways that are completely unprecedented. Normality is not yet on the horizon. And even when the ban is lifted there could be new protocols that could make ticketing prohibitively expensive — paramount among them the safe distancing dictate that could make the load factor a parody.
The magnitude of the unfolding trauma for India’s airlines is far too severe to ignore. The “Covid-19 & the State of the Indian Aviation Industry” report, released by Capa India recently, reveals that local air travel in the country will likely crash from 14 crore domestic passengers in 2019-20 to around 8-9 crore in the next financial year (2020-21). A not so generous calculation would see the need for $2.6 billion just to jumpstart the industry in India. At least 200 of the 670-odd aircraft in the Indian commercial skies will be technically axed as schedules are truncated.
The Capa India report had some more dire predictions to make and it is necessary to confront them rather than wish them away. The most significant ones among them include:
(A) The Indian aviation sector is likely to shrink significantly, even if some of the vulnerable airlines manage to survive. The trick lies in knowing if Indian aviation has any sugar daddies who will invest in the sector knowing profit is a long time coming. An absence of liquidity is a major issue.
Ironically, IATA chief economist Brian Pierce made a projection that now sounds like a travesty: Moreover, as the world’s largest democracy with a population of more than 1.3 billion citizens, India’s potential for further growth and industry development is very clear. Indeed, we expect air passenger numbers to, from and within India, increase by 3.3-times over the next 20 years, to more than 500 million passenger journeys per year.
This significant expansion is expected to be underpinned by a trebling in the proportion of middle-class households and further increases in time-saving options for air passengers. This highlights the important role aviation can play in connecting the country — both internally and with the rest of the world.
This strong growth outlook for air passenger demand will see India overtake Germany, Japan, Spain, and the UK within the next 10 years to become the world’s third-largest air passenger market. These are exciting times for the air transport industry in India. With international traffic expected to fall from approximately 70 million in FY 2020 to 35-40 million in FY 2021, and possibly lower depending on several factors, India will lose at least 30% of its 160 million passengers, if not more.
Capa India has cautiously added that these were only initial estimates and that these would be revised as the situation becomes clearer. Consumer sentiment jolted by the virus outbreak, government curbs on air travel, and uncertainty over when they would be relaxed will severely hit airlines and allied industries. Domestic air passenger traffic is expected to drop from an estimated 140 million in FY20 to around 80-90 million in FY21.
International traffic is expected to almost halve from around 70 million in FY20 to 35-40 million in FY21, Capa India said in the report. “Indian carriers will require a domestic fleet of around 300- 325 aircraft from October 2020 onwards, and an international fleet of 100-125 aircraft,” the report said. So much for the double-digit growth.
Bigger players like Vistara, SpiceJet, Air India, GoAir, and IndiGo are staring at deteriorating balance sheets. As per the recent report by the International Air Transport Association (IATA), the Covid-19 crisis is expected to impact over
29 lakh (2,932,900 to be precise) jobs in India’s aviation sector.
That is a very large chunk of talent, expertise, and experience and will call for multi-tasking, something no airline likes to engage in. The negative impact if the ban is lifted in June on airlines’ revenue would be $11.221 billion and that is not small change. The International Air Transport Association (IATA) has released its latest forecast.
It predicts that half of all airline business will disappear this year, with full-year passenger revenues falling 55 per cent compared with 2019, with traffic falling 48 per cent. CEO Alexandre de Juniac summed it up as “catastrophic”.
Emphasising the effect on the wider economy, de Juniac said: “If airlines lose one job, another 24 disappear somewhere in the value chain. That was behind our analysis last week when we said that some 25 million jobs are at risk”.
India won’t allow commercial flights to operate until it is confident that the coronavirus outbreak is under control, Union Aviation Minister Hardeep Puri said recently. The country’s cash-strapped airlines can only stand and wait
Salon business takes a massive hit in corona times
The industry, which depends on personal touch and human interaction, is fighting for survival.
From Anushka Sharma giving a haircut to hubby Virat Kohli to Tapsee Pannu chopping off her own hair, we’ve seen several celebs indulging in DIY personal care as the entire grooming industry has been under lockdown for the past few weeks amid the rising number of coronavirus cases. And now even though the government has permitted the opening of standalone beauty parlours and salons, the industry is far from the road to recovery. The predicament of the industry lies in the deeprooted doubts prevailing in the customer’s mind regarding their own safety. “I know the next six months won’t be good for the industry. The client is scared and is apprehensive to come to the parlour or salon. We need to work on that first, we need to work on client confidence which can only happen through education. It will take a lot of time.
We all have to work on it creating trust,” says Jawed Habib, India’s salon czar and chairperson of Jawed Habib Hair & Beauty Limited. From basic grooming like a haircut and facial to botox, nail and hair extensions, the entire gamut of the grooming industry has changed drastically. The industry, which is pegged at crores of rupees, has been terribly hit due to Covid-19. The industry, which depends on personal touch and human interaction, is bracing for the aftermath of the lockdown. “I think the big challenge is what to do right now, and what we need to do when the lockdown is lifted. What our sanitisation needs will be? What will be nontouch makeovers? We need to think how we can bring digital and AI into all of this. The morale of the people is down which makes it very stressful,” says Sameer Modi, founder and MD of the popular cosmetic brand Colour Bar. With everything connected to our social media handles via technology, it’s not just the owners of these salons and companies who are feeling the lockdown blues but also make-up and beauty influencers, as the advertisements have reduced drastically on their platforms.
“Current situation is bad; the brand budgets have gone down. The budgets have been slashed as there are no delivery happening. Brands mainly want to collaborate for brand awareness to the audience. There won’t be an ROI as no purchase will be made. Some brands are doing online marketing so that the product is out there in the buyers’ mind,” says Shilini Samuel, a digital creator. Many digital influencers are, however, trying to stay positive during the pandemic by creating educational content online. “I have started doing online makeup classes and teaching makeup every day. That way I can help people with my skills and motivate them as much as I can. I keep interacting with my brands and team members to come up with solutions. Right now, we don’t know the situation we are in and we don’t know what’s going to happen, but we can try to do what’s best,” says Saachi Bhasin Daga, an online beauty influencer. With the government giving a green signal to standalone salons and parlours, the industry is slowly attempting to revive itself. The first and the foremost priority for the industry seems to be winning the trust of the customer back.
“We will have to work with less manpower and make sure they wear sanitised gear and are safe. We were also planning to hire people who come from non-contaminated zones. We have to work on our social media skills and make sure people coming to us know it’s a safe place,” says Dr Jamuna Pai, celebrity skincare and wellness expert and founder of Skinlabs Clinic. Dr. Blossom Kochar, chairperson, Blossom Kochar Group of Companies, also believes that the most important thing is to build the trust. “People do need these things and they will finally come out. But for that sanitisation and hygiene are going to be very important.” Though the hardesthit in the industry have been the small salons and barbers who had to keep the shutters down from weeks and are now seeing a drastic reduction is footfalls. “The beauty and the hair industry needs to come together. It is a huge industry in India and we can raise a lot of fund, which can go to people that cannot afford to even open their small salons,” suggests Sapna Bhavnani, a celebrity hairstylist.
Online gambling grows by leaps and bounds in locked-down India
With all of India in lockdown, online gambling has become a favourite pastime for many people. Online games are not new and many are addicted to this craze but online gambling is catching up and how! An expert estimates this new industry to be worth $150 million and growing by the minute. While online games attract 75% of mainly male youth, now the youths are turning to online gambling, like poker and rummy. The most popular gambling avenues are lottery, racing, betting, casino, rummy, and poker. It’s an addiction for those who are hooked to their screen for hours. Teen Patti, a game very popular in India, especially during Diwali, has occupied the top 10 ranks in the virtual world too. With huge demand and popularity, many gaming sites are organising annual game tournaments. Legally, only a person of age 18 or above is allowed to play or participate in online gambling with no checks and balances. As a result, many minors have fallen into this trap. With no monitoring by government agencies, these minors use fake IDs to create online accounts.
Activist S. Balakrishna said he would file a PIL in the Bombay High Court praying for a ban on all online gambling sites. He said there are several websites for poker and sports betting like Ladbrokes on which you can bet on cricket, football and other sport with impunity. Many Indian bookies are betting on these sites on behalf of thousands of benami clients and making huge profits. As for poker, rummy and other card games, many are Chinese run and huge bets are placed in the games with almost no law enforcement in this area. India has no dedicated laws or a framework to deal with legal issues of online games and gambling. Gambling comes under the states’ list with different states having different laws for it. Few states like Sikkim and Goa have allowed games of skill while other states prohibit them in all forms. This issue becomes further complicated since the Supreme Court recognised rummy as a game of skill. Though online gambling companies in India are now required to comply with multiple Central and state regulations, the companies get away with it due to loopholes.
Data suggests that 11% of global Internet traffic is of online gambling and one in 20 accounts is connected to fraudsters. According to the 276th report of the Law Commission of India, the present market for online gaming is worth $360 million which is expected to rise up to $1 billion by 2021. Supreme Court lawyer Pradeep Rai said, “Any kind of gambling, either it is offline or online, falls under the same offence similar to hate speech and hate writing. It’s an organised crime offence which has taken place. Online gambling in a state like Maharashtra is completely banned whereas a state like Sikkim allows for the sack of revenue consideration. Any game, which has a monetary part, is considering to be an offence”
More foreign investment needs less sway of domestic interest groups
The sectors which could draw in the most investments are the ones where domestic entrenched interests maintain stiff roadblocks. The insurance sector is an apt example.
On the face of it, India has begun to get lots of foreign direct investment, yet there must be concerns it is not enough. Certainly, that would seem the reason why Prime Minister Narendra Modi met his ministers and top officials of finance and commerce ministries to discuss strategies to attract more money into India. Between FY14 and FY19 India has drawn in $286 billion, a 51 per cent jump over the previous five-year period FY10 to FY14. But it is quite apparent that the government policies in India often militates against such investments. The kerfuffle about Amazon and Walmart’s investments are not the only ones. The sectors which could draw in the most investments are the ones where domestic entrenched interests maintain stiff roadblocks. Let me explain with reference to the insurance sector.
As Covid-19 has made clear, we need lots of money here. As of now foreign investment (FDI) into the sector is at less than majority control at 49 per cent, despite a budget assurance in 2018- 19 to raise it upwards. Hundred per cent FDI is only allowed for insurance intermediary companies, which means largely brokers and other mediators between the companies and the buyers of insurance. Why is this so? Insurance is a capital-intensive sector. Unlike banks where a loan can be made on the basis of the leverage of the deposits held, each policy written by an insurance company needs additional capital. This makes expansion of business in an insurance company costly. It favours those companies which have deep pockets. It is also necessary to give the insured a feeling of confidence that her risks are truly covered. The Insurance Regulatory and Development Authority of India (IRDAI) has, therefore, prescribed a stiff 150 per cent solvency ratio for insurers.
Yet, Indian insurance companies do not have the deep pockets and would rather hide behind government policies not to face competition from abroad to expand their business. This is the reason why despite the presence of 24 life insurance companies and 34 non-life companies, the needle of insurance penetration has hardly moved. In the past 16 years it rose by mere 1 percentage point from 2.7 per cent in 2001 to 3.7 per cent in 2017 (IRDAI). The companies are however doing well, except for three state-run non-life insurers. (New India, also state run, is doing well.) They have chased profitability instead of growth to compensate for their limited capital and this is the reason why all of them offer a narrow range of business with overkill in the market of motor, health and fire. In the life business, the companies have chosen to concentrate their cover on the urban salaried population, for obvious benefit of better mortality rates and the consequent scope of selling more costly products. Consequently, new-age risks are not offered since those will involve more pressure on capital. Delivery models too are not improved to make those less dependant on brokers or channel partners since there is no urgency to change these marketing strategies. State government policies are also not helpful. Those with weak finances do not want to run insurance cover for health or crops. They depend instead on models that do not draw out money from their budget.
So, there is no competition among the companies to offer cheaper products. The loser is the Indian, shorn of adequate insurance cover that the pandemic has sharply exposed them to. The prescription should thus be to allow more FDI in the sector so that management of these insurance companies passes on to well-financed companies abroad. It will also spur mergers and amalgamations in the sector, which will also yield the same beneficial result. But no domestic insurance company will ask the government to break their cosy chain. IRDAI did a survey among the companies last year and passed on its recommendations to the finance ministry.
It has not yielded results, because the lobbyists have been able to show that the jump from 26 to 49 per cent has not yielded results. In the life insurance sector, against the 49 per cent headroom of foreign investment, the aggregate foreign investment is only 35.49 per cent. For nonlife insurance, the headroom is wider. The space for foreign investment has been utilised to less than half of the permissible limit at 23.66 per cent as on March, 2019. It is a circular reasoning, though. At 40 per cent, few investors from overseas will company in. At over 51 per cent, the money will be more forthcoming. To make this change in FDI rules does not require adoption of any new strategy to bring investments into the sector. It requires paying less attention to the domestic interests which would wish to block the investments. That is only “fast-track mode” needed. Subhomoy Bhattacharjee is a senior journalist and Senior Adjunct Fellow at RIS.
Amarinder urges Shah to allow small industries to operate
Expressing concern over the plight of small industries owing to the continued lockdown, Punjab Chief Minister Captain Amarinder Singh on Monday sought the Centre’s permission to allow these to operate by engaging labour from the family or the neighbourhood. The Chief Minister has written to Union Home Minister Amit Shah to allow small industries, located in urban areas, to function outside the containment zones and be subject to full Covid preventive measures as per the specified SOPs in this regard. Pointing out that most industrial cities of Punjab have recently come under the Red Zone because of people coming in from others states, he said that these industries can function with 2 to 5 people comprising of family and neighbours.
He said that a large number of tiny, cottage, micro and small industries operating in the state, employ around 2-5 persons who reside in the neighbourhood and in many cases only family labour is used with no external workers at all. Often these small and tiny units are vendors of large units and supply them with some essential components, failing which even large units, even though permitted, cannot function, he further observed, seeking amendment to the instructions/guidelines issued by the Union Home Secretary. The Chief Minister has solicited Amit Shah’s prompt intervention to direct his ministry to amend these guidelines to allow the said industries in Punjab to function.
Covid-hit hospitality sector in ‘free fall’, seeks government help
Hoteliers & restaurateurs look to the government for easement of liquidity via bank loans.
Every summer, year after year, hoteliers in the Indian hospitality industry have found themselves busier than ever before. Handling scores of bookings was a norm every peak summer season as domestic and international tourists flocked to their favourite destinations to get a respite from the hustle and bustle of their busy lives. But this time the situation is different; hotel rooms are occupied, though not by tourists but by tired corona warriors, who the hotel industry has opened their doors to, as infections continue to spike in the country despite weeks of lockdown. “We could be headed towards a very unfortunate and virtual collapse of the sector. We are in the bright red zone — the first to decline, and it takes us the longest to bounce back. Even if the lockdown is lifted today, there are businesses that are going to shut and there are jobs that are going to be lost. That is the unfortunate truth,” says Gurbaksh Kohli, vice-president, the Federation of Hotel and Restaurant Associations of India. The situation is no better for restaurants as the hotel, travel and restaurant industry are inextricably interlinked.
The restaurant industry, which is bleeding profusely due to the impact of coronavirus, is hoping for some support from the government. “Our ability to bounce back and regain a foothold gets lost every day that support does not come in. I don’t want to sugarcoat my words: we are looking at an existential crisis,” says Anurag Katiyar, president, National Restaurant Association of India (NRAI). Not just restaurants, but also the hospitality industry as a whole claim they need some support from the government, simply to stay afloat. “The government needs to understand that hospitality is a highly capital-intensive business. None of the fixed costs that are part of our business, has there been any relief of any kind. Business and profit aside, just for the sake of people in our industry, I think they need to wake up and smell the coffee. First priority is liquidity, and then have the other parts thrown in. The government cannot wait any longer as we’ve been breathing fire for too long.
Too many industry players won’t be able to survive beyond a 30-60-day period. The government will be staring at a huge unemployment crisis,” says Ratan Keswani, deputy MD, Lemon Tree Hotels. The situation seems so grim that the biggest names in the hospitality industry claim that they are struggling for bare survival. “Right now, nobody knows anything. I can’t predict anything for the next 3 or 6 months. The issue before us right now is how do we pay our people… The most critical need is deferment of loans and principal and interest of loans for 12 months,” says Ajay Bakaya, MD, Sarovar Hotels and Resort. Another challenge in front of the industry seems to be regaining the trust of the customers back. “The fear psychosis that will exist in the minds of travellers is a big problem. It’s important to think about the traveller’s point of view, how do we give them the comfort and confidence to start travelling? I think they will be an overzealous lot that will start travelling. But there will also be conservative people, who will need confidence to travel that the places and hotels they are entering are safe to enter,” says Bhanu Chopra of Rategain, a travel and hotel software company. Kapil Raizada, Co-founder of RailYatri, seems to agree. “We need to address the fresh concerns of travellers, maybe change the construct of our products, at different price points which we don’t know what they will be. Revival won’t be easy and the industry needs to act now to formulate a strategy feel many,” he says.
“We need to quickly work in a certain direction for the actual delivery of our product post the lockdown. It’s not going to be a flip of a switch,” says Varun Chaddha, CEO of Tirun, a leading travel company with an expertise in cruises. Most of the industry leaders The Daily Guardian spoke to batted for the US model, where the loan given to companies is passed on as wages. “That is the way we need to go. We cannot have millions of people desperate for cash. This is going to become a societal problem. People cannot survive without basic livelihood,” says Rohit Khosla, Executive VP, Operations, IHCL. With the losses of the hotel industry pegged at Rs 650 crore as a direct result of the pandemic, the industry feels it needs to act now, not only to press the government for relief but also to create a long-term strategy to regain customer trust as things start limping to normalcy.
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