Domestic passenger and cargo transportation has declined considerably across the country, latest data released by Iran Airports Company show.
About 14.77 million passengers were transported domestically by air during the first seven months of the current fiscal year (March 20-Oct 21), indicating a 40% year-on-year drop.
Landings and takeoffs decreased by 27% to 150,470 during the period under review.
Cargo transportation experienced a 41% decline to 111,085 tons.
The data also show Iranian airports' domestic air passenger traffic during the seventh month of the current fiscal year (Sept. 22-Oct. 21) declined by 18% to 2.78 million, compared with the same period of last year.
The figure show a 5% decline compared with the previous month, indicating stagnation in airliners' business as a result of the second wave of the Covid-19 outbreak.
Over 21,778 tons of cargos were handled during the month under review, which shows a 10% drop year-on-year.
The IAC report also shows that airports in Iran handled 26,680 landings and takeoffs during the seventh month of the year, posting a 5% fall compared with the same period of last fiscal year.
Tehran's Mehrabad International Airport solely accounted for 36% of domestic air passenger traffic during the month. More than 1 million passengers were transported through the airport during the month, 17% less than the same period of last year.
Mashhad International Airport and Kish International Airport followed with 10.5% and 7.27% share of the total air passenger traffic, respectively.
IAC's monthly statistical reports included data over the cancelation of Iranian airliners' flights. As per the report, 46% of Iranian airliners' scheduled flights were canceled during the month to Oct. 21.
Taban Air topped the list, with its cancelation rate standing at 70% during the month under review. It was followed by Sepehran Airlines with 63%.
Saha Airlines and Iran Air recorded the best performance, as their cancellation rate stood at 32% and 33% respectively.
*** Price Increase
The Supreme Civil Aviation Council approved a 10% rise in the ticket prices of domestic flights compared with prices set by the Association of Iranian Airlines in the month ending June 20.
Members of the council also rejected a bid to set minimum price on air tickets and prohibited airlines from selling tickets at prices higher than the set price ceilings, Fars News Agency reported.
The Supreme Civil Aviation Council consists of representatives from the Ministry of Economic Affair and Finance and Ministry of Foreign Affairs, a member of Majlis Development Commission, representatives of the Plan and Budget Organization, Public Prosecutor and Revolutionary Court, Civil Aviation Organization, the managing director of the Airline of the Islamic Republic of Iran and representatives of domestic airlines.
At a meeting of the council in November, representatives of domestic airlines presented a report on the financial situation of their companies and costs per hour of domestic flights with regard to the increase in foreign currency exchange rate, decline in the number of flights and passengers due to the outbreak of coronavirus, the airlines’ obligation to sell tickets at up to 60% of plane’s total seating capacity in line with social distancing rules, and hardships caused by sanctions.
As per the decision of the National Coronavirus Headquarters on new measures to prevent the further spread of Covid-19, all types of aircraft need to observe social distancing by operating at a fraction of their passenger capacity.
In addition to the pandemic, the rise in foreign currency exchange rates has also increased airlines’ expenses.
*** Relief Package for Airlines
As part of the economic relief package worth 80 trillion rials ($320 million) for the transportation sector approved by the government, airlines will receive a total of 20 trillion rials ($80 million) in loans to help them weather the hardship caused by the new coronavirus.
According to Secretary of the Association of Iranian Airlines Maqsoud Asadi-Samani, airlines have been introduced to designated banks and are going through the loan approval process.
“Since the beginning of June, airline companies could register at Kara.mcls.gov.ir for the coronavirus loans, which will be offered at a lending rate of 12%,” he was quoted as saying by News.mrud.ir in July.
“Air travel and tourism have been the hardest-hit industries in the early days of the Covid-19 pandemic. Currently, domestic flights are carried out through some airports in the country, but aircraft fly 40-50% short of full capacity to allow for social distancing.”
Asadi-Samani said in April that Iranian airlines were estimated to have sustained 30,000 billion rials ($120 million) in losses by April 3, as the pandemic halted flights within the country and abroad, adding that three airlines had grounded their entire fleet.
By the end of May 2020, most airlines in the world will be bankrupt, says CAPA – a trusted source of market intelligence for the aviation and travel industry.
It stressed that coordinated government and industry actions are needed now, if catastrophe is to be avoided. British Airways CEO Alex Cruz says today’s coronavirus crisis is more serious than any previous aviation crisis.
As the impact of the coronavirus and multiple government travel reactions sweep throughout the world, many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants.
Cash reserves are running down quickly, as fleets are grounded and what flights there are operate much less than half full.
Forward bookings are far outweighed by cancellations and 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, Aviation24 reported.
*** 3 Years Before Recovery
Iran's aviation industry, a sector harshly hit by the spread of the new coronavirus, needs at least three years to make a comeback, says Siavash Amirmokri, the managing director of Iran Airports Company,
Revenues raised from overflights account for nearly 68% of Iran Airports Company's annual income, he was quoted as saying by Fars News Agency. "Overflight is where we suffered the most during the pandemic. We need to diversify our sources of revenues in order to compensate the decline in income under the influence of Covid-19," he said.
Iran Airports Company’s revenues from overflight charges decreased by 46% or $69 million in the first half of 2020 compared with the same period of 2019.
Optimistic projections put the number of aircraft flying over Iranian airspace in 2020 at 112,000 and expected revenues to reach 10,000 billion rials ($40 million), aviation officials have been quoted as saying.
Amirmokri put extra emphasis on non-aeronautical revenue, as he believes these revenues have the potential to help prop up the sector during the ongoing stagnation.
"Our statistics indicate that non-aeronautical revenue had a 10% share in the total revenues of major Iranian airports in the fiscal 2019-21," he said.
Iran Airport Company has recently installed a comprehensive retail platform in 11 airports across the country, in an attempt to supervise the operations of duty-free shops and contractors.
"Unfortunately, some retailers have failed to settle their debts to airports in recent years ... The new platform helps enhance the transparency of contracts and allows airport officials to receive debts from contractors," he said.
The Airports Company is hopeful of recovering about 50% of the contracts' delayed debts by March 2021, using the newly-installed platform.
*** Many Airline Jobs at Risk Globally
Hundreds of thousands of aviation jobs are at risk without more state aid, a global industry body has warned.
The International Air Transport Association downgraded its 2020 traffic forecasts, after "a dismal end to the summer travel season".
The association, which represents 290 airlines, says it expects traffic to be 66% below the level it was in 2019.
IATA estimates that it will be at least 2024 before air traffic reaches pre-pandemic levels.
A second surge in Covid-19 cases and more government restrictions meant the sector has not seen a strong rebound.
The travel industry saw a precipitous drop in business after the coronavirus developed into a pandemic.
Through the year, major airlines, airports and tour firms have collectively announced thousands of job losses.
"Absent additional government relief measures and a reopening of borders, hundreds of thousands of airline jobs will disappear," IATA chief executive, Alexandre de Juniac, was quoted as saying by BBC.
He called for Covid-19 tests to be routinely carried out on passengers before flights depart, to increase consumer confidence in air travel and make governments more willing to open borders.
Airlines have already shown signs of struggle this year.
Last month, Virgin Atlantic announced it was cutting 1,150 more jobs, on top of 3,500 jobs it had already cut earlier in the year.
The move, it said, was necessary for its survival, and was part of a £1.2 billion ($1.5 billion) rescue plan to secure its future for at least 18 months.
In August, the world's biggest airline American Airlines said it would cut 19,000 jobs in October when a government wage support scheme comes to an end. The jobs being cut make up 30% of its pre-pandemic workforce.
And earlier in the year, United Airlines said as many as 36,000 jobs were at risk. Germany's Lufthansa warned it could cut 22,000 positions and British Airways said it was slashing up to 13,000 jobs.
