Aviation consultancy firm Centre for Asia Pacific Aviation India (CAPA India) has released a report on ‘Key issues to watch in Indian Aviation in 2021’. The report covers the impact on the industry as well as predicts top trends, among others.

Due to the Covid-19 outbreak, CAPA India said that the air travel demand remains “uncertain”, especially when it comes to international air traffic this year. Long haul traffic, in particular, is likely to take some time for the revival.

The report indicates that the Indian aviation sector is moving towards consolidation, and it could result in a two-three airline system in the near to medium term.

CAPA India has predicted that “after almost 30 years of deregulation a largely market-driven sector will finally emerge from 2021, with long term strategic implications for consumers, competition and industry structure.

The government’s commitment to the privatisation of Air India and airports has been appreciated by CAPA India.

The firm has revealed that out of all airlines, Indigo is likely to emerge significantly stronger than the competition from Covid-19, and this is largely due to its strong balance sheet.

Regarding the cap on airfares, CAPA India foresees that the government may maintain price floors and caps, at least for the first half of 2021.

The latest report also stated that FY2022 is expected to be another year of large losses for the entire industry, especially for the airlines.