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#Post 11 : How Much Did we Suffered from COVID-19? (Part 1)

The damage caused by COVID-19 is not confined to only select pockets of businesses  but it is a widespread malady that is expected to keep the economy sick for a longer time. While the magnitude of the impact may vary from sector to sector, some sectors that have suffered the most and continue to suffer. Aviation, retail, automobiles, real estate and tourism are the five sectors that are at the front among the sectors that are suffering the utmost damage due to the pandemic.

(Image source: Flightradar24) 


Aviation Sector

Aviation is the worst-hit sector, with both international and domestic flights canceled on account of lockdown. Industry experts highlight that the aviation sector globally incurs higher fixed costs and operates at very thin margins due to high competition from low-cost carriers (LCC). In the case of the lockdown is extended, the sector will have a serious liquidity crisis which will raise questions on their survival. Even after normalcy returns, it is expected that the sector will have a longer period of slowdown due to travel restrictions and perhaps a behavioral change in public spending. If the lockdown extends, the domestic aviation players are likely to see severe liquidity issues and consolidation in the sector. Even if the operations resume, we expect that the outlook for the aviation industry has degraded given travel restrictions and changes in public preference which may stay for one to two years. 

The recent sharp decline in crude prices is positive for the aviation sector. However, the benefit of lower aviation fuel can come only when airlines operate at optimum utilization. Even after lifting of lockdown travel activity be very slow as people would still avoid traveling for some time. CAPA India, a leading travel and tourism consultancy firm, said mentioned in its report last published report (May 2020), that global aviation activity has faced a shortfall in demand by nearly 2/3rd as compared to its actual demand during the same quarter in 2019. Except for a handful of cargo and repatriation charter flights, 

Tourism and Hospitality Sector


Hotel and Tourism sector has faced a significant and visible impact of Covid-19 across its geographical segments - and in almost all verticals such as leisure, adventure, heritage, MICE (Meetings, Incentives, Conferences & Exhibitions), cruise and corporate. Now with travel restrictions from India have been extended to over 80 countries and most of the flights of major airlines are being suspended. A recent trend suggests that companies will be emphasizing on Work From Home culture, considering the lower budget required for Home and conference calls/ meetings as a substitute against traveling cost. The tourism industry is facing an unprecedented challenge from COVID-19 resulting in grounded airplanes, shut down hotels, and affected the tourism industry in many ways. 

To be continued........
by Sneha Paranjpe   
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