Companies across sectors in aviation, healthcare, retail and entertainment are bracing for staff shortages, demand squeeze and supply disruptions due to a variety of Covid-related restrictions imposed in many states as well as the rising spread of Omicron. While the situation across supply lines is near normal so far, industry people expect turbulence going ahead as employee health concerns cause shortages in several sectors.
Banking and financial is another sector where stress could rise due to part closure of business activity. Meanwhile, healthcare sector is preparing for far more in-home care for patients affected by Omicron as doctors expect fewer hospitalisations, as per experts.
“Overall there is a good amount of preparation. We are preparing for more treatment through video calls and (we expect) a lot of it will be home care,” said Dr Naresh Trehan, CMD of Medanta and chairman of CII National Council on Healthcare. Trehan noted that while there was no shortage among hospital staff due to infections so far, widespread infection potentially causing a shortage in staff was a concern.
Apart from the service industry, small and medium scale manufacturing units — where blue collar workers had returned to work — have also been asked to come in shifts or the timings have been reduced to allow them to return home before night curfew rules kick in. “We have reduced our factory timings till 6 pm for the safety of our labour. Today, we have a total strength of 800 employees and around 50 per cent of them have been given work from home,” Avneet Singh Marwah, CEO at Noida-based television manufacturing company SPPL, said.
Marwah also expects an impact on supply chain and imports as the number of cases rise with states bringing in their own rules to curb the spread of the Omicron variant of Covid-19 virus.
Mumbai-based movie business analyst Taran Adarsh said at least four major film releases have been postponed due to Omicron concerns. These include Jersey starring Shahid Kapoor, Yash Raj Films’ Akshay Kumar-starrer Prithviraj, SS Rajamouli’s RRR, and the latest being T-Series’ Radhe Shyam. It is to be noted that during the first Covid wave in 2020, lockdowns and cinema shutdowns led producers to release most of their films on OTT platforms.
Aviation is another key sector directly impacted. Even as domestic travel demand stayed robust towards December-end, rising Covid cases and curbs imposed by various states in the last week of of that month led to an uptick in cancellations. For instance, West Bengal introduced restrictions on flights from Delhi and Mumbai, allowing airlines to operate such services only on Mondays, Wednesdays and Fridays.
On Tuesday, daily domestic air passenger traffic fell below the 3-lakh mark for the first time since November, amid third Covid wave concerns. As per data sourced from the Civil Aviation Ministry, the total number of departing domestic passengers on Tuesday was 2,85,965, and the total number of domestic flight departures was 2,660. At its peak in December, the number of flight departures was over 2,800 — i.e. around 200 flight departures have been cancelled in the recent days.
“So far what we’ve witnessed is that travel restrictions are coming but they’re not as serious as the curbs on movement within cities like Delhi and Mumbai. That is what is causing people to amend their travel plans. On the international sectors, there has been a palpable impact since the Omicron outbreak but now even domestic bookings are getting impacted,” a senior executive at a low-cost airline said.
Notably, in the United States, a major cause of cancellation of domestic flights was not the receding travel demand but hundreds of airline crew members getting infected with Covid that forced the carriers to cancel flights.
Meanwhile, India’s services sector activity fell to a three month low in December, mainly due to deterioration in international demand linked to Covid curbs. IHS Markit said, “Underlying data suggested that the latest increase in new orders was centred on the domestic market, as new business from abroad fell further. The deterioration in international demand was linked to Covid-19 restrictions, particularly around travelling … December data showed renewed job shedding in the service economy, but the rate of contraction was only slight.”
To navigate state-wise curbs, domestic retailers are calling for parity in restrictions on traders as curbs on cities like Delhi may lead to “trade transfer” as customers could easily travel to neighbouring states with fewer restrictions.
“Lack of parity is encouraging people to go to other cities and make purchases, particularly for cities and areas sharing borders with other states,” said Praveen Khandelwal, secretary general, Confederation of All India Traders (CAIT). This is affecting B2B (business to business) trade and not just business-to-consumer trade. Restrictions like odd-even in Delhi were impacting the estimated 5 lakh traders that come to Delhi to purchase supplies as they were not able to make all the required purchases on a given day due to some shops being closed.
Footfall in key markets of Delhi has come down due to odd-even restrictions as consumers seem to be postponing purchases, said a handloom shopkeeper in Gandhi Nagar market in East Delhi.
Over the last week, key states including Delhi, Haryana, Gujarat, Karnataka, Maharashtra, Goa, West Bengal, among others, have clamped down on economic activities, reduced working hours for shops, restaurants, and hotels, and put a cap on the number of people in marriage functions or cinema halls. On Tuesday, Delhi announced fresh restrictions including a weekend lockdown.
“Restaurants, which have been running at 50 per cent capacity since the announcement of Unlock Phase One, should be allowed to operate for longer hours to avoid the rush,” National Restaurant Association of India president Anurag Katriar said.
“Almost all the restaurants are working with double-vaccinated staff and that too in a very tightly regulated environment. All other industries and activities in other walks of life are continuing unperturbed. So perhaps it is only for optics that the restaurant activities are curtailed. We just hope that there is no knee-jerk reaction from the government and authorities going forward,” he added.
An employee at a restaurant in Kailash Colony, Delhi, said footfalls have thinned down sharply and the weekend lockdown means “people almost do not step out for lunches and dinners.”
With inputs from Pranav Mukul