Many countries ban flights from India
Domestic travel will also drop due to fear of COVID-19
Bubble in travel is holding back a spike in infections in India
India’s jet fuel demand is expected to fall short of the latest headwinds – a mutant variant of COVID-19 – as many states in the country impose restrictions and countries around the world ban or restrict travel to and from South Asia to limit the spread of the variant.
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“CAVIAR [Investment Information and Credit Rating Agency] continues to maintain a negative outlook for the creditworthiness of the Indian aviation industry. The outlook reflects ICRA’s view that Indian airlines’ financial performance is likely to remain weak in the short to medium term amid weak air traffic, ”the agency said recently.
The US, UK, Singapore, Kuwait, Canada, France, Australia are among the countries that recently banned flights from India or imposed other restrictions due to the unprecedented spike in COVID-19 cases in the country as it grapples with acute shortages. oxygen cylinders and medical supplies, including vaccines.
“The situation in India is really bad right now and I believe that more international flights will be affected as countries want to contain the spread of the virus,” a source in Singapore said on May 3, adding that market sentiment was weak. already hurts.
Reflecting the recent situation, on April 30, a tweet from the Directorate General of Civil Aviation of the Government of India said that the suspension of scheduled international commercial passenger flights to and from India had been extended until 31 May. However, international travel may be permitted. on the selected routes by the authorities on an individual basis, he added.
While the lockdown and curfew were imposed regionally, the government of Indian Prime Minister Narendra Modi has so far refrained from imposing a nationwide lockdown this year. This comes after nationwide isolation hit the economy hard last year.
Pandemic adviser Anthony Fauci, however, recently proposed isolating India for several weeks to stem the rise in cases, according to various media reports.
This could be possible if the situation does not improve, even if aid is hurriedly pouring in from around the world to alleviate the situation, sources said.
India’s Ministry of Health reported more than 300,000 new cases of COVID-19 for the 12th straight day on May 3, bringing the total to nearly 20 million.
Aviation kerosene demand in India fell in April
According to the latest figures from the Oil Planning and Analysis Division, demand for jet fuel in India in March reached a 12-month high of 475,000 tons, up 9.7% from a month ago.
PPAC data released on April 12 showed that the last time demand for jet fuel in India was higher in March 2020 at 483,000 tons. From the beginning of the year to the present, the demand for aviation fuel in India was 1.35 million tons, which is 561,000 tons, or 29.35%, less than a year ago.
While the increased demand was due to increased capacity for domestic flights in the country, domestic flights could also be a victim if a nationwide lockdown goes into effect, sources said.
“I think the forecast for demand in India should be lower in the future,” a trade source said.
“April was a bad month as there was a spike in infections, so maybe [international] flights will be difficult, but on the domestic front, I think we should also see lower numbers as the death toll is rising rapidly and I think people will think twice before traveling and catching a new variant of the virus, ”he added.
“We have to assume that a worst-case scenario in April 2020, where 90% or more flights will be suspended, is now ‘possible’, but that depends on how the virus and government policies evolve.” – Alexander Yap, Senior Analyst at S&P Global Platts Analytics. said.
Prices have dropped as travel fear looms
International passenger markets remained weak due to ongoing border restrictions, especially in the Asia Pacific region, exacerbated by uneven progress in vaccination rollouts and resumption of COVID-19 transmission in some countries, notably India, the Asia Pacific Airlines Association said. report dated April 29.
This is because some of the positive news about air bubble travel elsewhere has been mitigated by the recent spike in infections in India, leading to some volatility in jet fuel prices.
Aviation fuel prices were in negative territory due to an increase in the level of COVID-19 infection. At the Asian close at 08:30 GMT on May 3, the fast exchange time spread remained in the contango pattern, meaning that jet fuel prices are weaker and fail to deliver a timely premium of minus 6 cents a barrel. According to Platts, the swap time spread last bounced back on February 4, 2020, at plus 15 cents a barrel.