As the Covid-19 cases in India cross 4,000 with worldwide cases at 1,284,665, KPMG, a multinational professional services network, has put together a paper that offers a foresight on the business landscape, including aviation and tourism in India.
Analysing the impact, the study throws some light on the overall situation of Indian economy amid the pandemic:
- Steps taken to contain its spread, such as nationwide restrictions for 21 days and a complete lockdown of states, have brought economic activity to a standstill and could impact both consumption and investment.
- While Indian businesses, barring a few sectors, can possibly insulate themselves from the global supply chain disruption caused by the outbreak due to relatively lower reliance on intermediate imports, their exports to Covid-19 infected
nations could take a hit.
- In sum, the three major contributors to GDP – private consumption, investment and external trade – will get affected.
The study highlights then goes on to analyse the impact of Covid-19 on various sectors.
Here are the excerpts on the analysis of the impact of the pandemic on Indian aviation and tourism industries:
- With international and domestic travel closed, demand for turbine fuel will substantially decline.
- Large scale cancellations. Indian Association of Tour Operators (IATO) estimates the hotel, aviation and travel sector together may incur loss of about ₹85 billion due to travel restrictions imposed on foreign tourists.
- Outbound travel and inbound travel to India will be at an all time low.
- Impact likely to be felt on both white and blue collar jobs.
- The World Travel and Tourism Council (WTTC) estimates the crisis to cost the tourism sector at least US$22 billion, the travel sector shrinking by up to 25 per cent in 2020, resulting in a loss of 50 million jobs.
- As per International Air Transport Association (IATA), 2020 global revenue loss for the passenger business is estimated between US$63 billion (11 per cent) and US$114 Billion (19 per cent).
- On account of Covid-19, the Indian tourism and hospitality industry is staring at a potential job loss of around 38 million, which is around 70 per cent of the total workforce.