NEW DELHI - With the number of coronavirus patients growing significantly in India each day, the world's third biggest domestic aviation market has also begun feeling the heat of a downturn caused by the pandemic.

A report from the Centre for Asia Pacific Aviation India (Capa India) released on Wednesday (March 18) anticipates a fall of around 50 per cent in domestic air travel demand in India in the next six to eight weeks.

The report also notes that while year-on-year yields have already fallen by around 12-15 per cent in the first half of March, revenues could further deteriorate by 25 per cent or more.

Combined with a fall in demand for international air travel to and from India - currently estimated between 60-70 per cent - Capa India predicts Indian carriers may have to ground around 150 aircraft, including almost all of their international fleet.

This number is expected to increase as more domestic operations are curtailed over the coming weeks.

"If the decline in traffic continues to be severe, the majority of the fleet could be grounded by April," said the report.

It warns that the situation could deteriorate quickly causing a significant downward revision for its estimates.

This grim analysis comes at time when the Indian government, according to a Reuters report, is working on a rescue package worth 119 billion rupees (S$2.3 billion) for the country's aviation sector, besides considering temporarily suspending payment of taxes to help tide it over the coronavirus crisis.

One of the demands made by the airlines to the government is a 30 per cent reduction in aeronautical charges for six months.

This is a payment made to the government for various services such as route navigation. CAPA India has also recommended that the government revise aviation turbine fuel prices on a weekly basis, so that airlines can take advantage of lower rates as soon as they become available.

Signs of stress have already become evident among Indian aviation players.

IndiGo, the airline with the biggest domestic market share, announced a pay cut for its senior employees on Thursday.

"With the precipitous drop in revenues, the very survival of the airline industry is now at stake," IndiGo CEO Ronojoy Dutta reportedly told the company's employees in an e-mail.

GoAir, another Indian airline, has asked some of its employees to go on short-term leave without pay and also suspended all its international operations.

The Capa India report said that the reduced scale of operations could have consequences for around 30 per cent of airline staff and up to 50 per cent of ground handling staff.

While this could be handled for the first couple of months through mandatory leave and leave-without-pay initiatives, an extended downturn "will inevitably" lead to significant redundancies, it added.

Even airport operators in India are reeling from a cascading impact of the downturn in aviation business.

"We are facing a massive cash flow problem," Mr Satyan Nayar, secretary-general of the Association of Private Airport Operators (APAO), told The Straits Times, adding that the association plans to ask the government for a moratorium on concession fee payment.

Airports privately managed pay the government a certain fee. The Delhi Airport, for instance, pays a revenue share of around 46 per cent to the Airports Authority of India.

"This is paid not on basis of the actual revenue generated but is based on a business plan submitted in advance. Moreover the revenue share payment too has to be made in advance," Mr Nayar said.

He added that airports have to pay for certain fixed costs, such as those incurred on maintaining runways and aprons, despite reduced air traffic.

"We also have many concessionaires at our airports that purely depend on footfall for their business. They are also going through a financial crisis and seeking a moratorium on their rent and other payments."

However, some additional revenue generation measures proposed by the aviation industry in India have been controversial and deemed unfair to air passengers.

One such move was the demand by the APAO to impose a levy or "corona cess" on air passengers to help private airports cope with reduced earnings and additional operations such as screening. The idea has been dropped following criticism.

Another move being discussed by Indian airlines, according to a report in The Times of India, is to ask passengers travelling with luggage to pay a separate handling fee. But this too has raised eyebrows.

"It is unfair to put these additional costs on air passengers at a time when everybody and every business is under stress," said Mr D. Sudhakara Reddy, founder and national president of Air Passengers Association of India.

"These additional charges on passengers, moreover, are not going to raise much revenue when operations have been curtailed and the passenger load factor has come down.

"How much are you going to fleece a person who is daring enough to take a flight and must be doing so for an emergency? How can you punish someone like that?" he told ST.

The aviation downturn is not unique to India and has emerged as a global concerns.

Earlier this week, Capa India had said that most airlines in the world will be bankrupt by the end of May 2020.