A day after IndiGo announced it would lay off 10% of its employees, the Centre of Asia Pacific Aviation (CAPA India) – a global aviation consultancy – predicted the failure of one or two Indian airlines would be unavoidable in the near future.

CAPA India said IndiGo’s decision to lay off workers due to the impact of the Covid-19 crisis is the beginning of a painful process for Indian aviation.

CAPA tweeted on Tuesday: “Industry conditions are such that one or more airline failures appear inevitable. Airlines have limited options to turn to for funding except their promoters, given that 3rd party investors will be reluctant to provide capital right now, and the government is unwilling to do so.”

On July 20, IndiGo, India’s largest airline by market share, announced the lay-offs due to the pandemic.

CAPA said, “The decision by IndiGo to lay off 10% of its staff is the beginning of a painful process for Indian aviation as things start to unravel from the impact of Covid-19 in India. It will be impossible to survive this crisis without a strong balance sheet.”

Airlines have been struggling since the Covid-19 lockdown was announced in late March. Even after domestic operations partially resumed from May 25, most aircraft are on the ground as airlines have been operating in a limited manner with only 60% of their capacity due to poor load factor.

“Even while the state government has allowed 50 take-offs and 50 arrivals from Mumbai, not all are operating their planned flights, as demand has been low,” said a senior airline official who declined to be named.