Companies from all sectors in the aviation, healthcare, retail and entertainment industries face staff shortages, demand bottlenecks and supply disruptions due to a large number of Covid-related restrictions imposed in multiple states as well as the increasing spread of Omicron. While the situation across the delivery lines has so far been almost normal, industry representatives expect further turbulence, as health concerns of employees in several sectors lead to bottlenecks.
The banking and financial sector is another area where the stress from a partial cessation of operations could increase. Healthcare, for example, is preparing for much more home care for patients affected by Omicron, as doctors expect fewer hospital stays, according to experts.
âOverall, there is good preparation. We are preparing for further treatments through video calls and (we expect) that much of it will be home care, âsaid Dr. Naresh Trehan, Chairman and CEO of Medanta and Chairman of the CII National Council on Healthcare. Trehan noted that while there has been no shortage of hospital staff due to infection, a widespread infection that could potentially lead to staff shortages is a cause for concern.
Aside from the service industry, small and medium-sized manufacturing facilities where workers had returned to work were also asked to come in shifts or times were shortened so they could return to their homes before the nightly curfew went into effect in.
âWe have shortened our working hours to 6 p.m. to protect our employees. Today we have a total of 800 employees, around 50% of whom work from home, âsaid Avneet Singh Marwah, chief executive officer of Noida-based television company SPPL.
Marwah also expects an impact on the supply chain and imports as the number of cases rises as states put their own rules in place to contain the spread of the Omicron variant of the Covid-19 virus.
According to Taran Adarsh, a Mumbai-based film business analyst, at least four high-profile film releases have been postponed due to Omicron’s concerns. These include SS Rajamoulis RRR, Shahid Kapoor-Starrer Jersey, Yash Raj Films’ Akshay Kumar-Starrer Prithviraj and the latest one is Radhe Shyam – produced by T-Series starring Prabhas. It is noteworthy that during the first wave of Covid-19 in 2020, lockdowns and closings of cinemas prompted producers to publish their films on OTT platforms like Netflix, Amazon Prime, Disney + Hotstar etc.
Aviation is another key sector that is directly affected. Even though the demand for domestic travel remained robust towards the end of December, the rising number of Covid-19 cases and the various restrictions imposed by state governments in the last week of December led to an increase in cancellations. West Bengal, for example, introduced restrictions on flights from Delhi and Mumbai so that airlines can only operate such services on Mondays, Wednesdays and Fridays.
On Tuesday, daily domestic air passenger traffic fell below the 3 lakh mark for the first time since November due to concerns over the third wave. According to the Ministry of Civil Aviation, the total number of departing domestic passengers on Tuesday was 2,85,965 and the total number of domestic flights was 2,660. At its peak in December, the number of departures in the country exceeded 2,800 – meaning around 200 departures have been canceled in the past few days.
âSo far we’ve seen that Travel restrictions are coming but they are not as severe as the restrictions on movement in cities like Delhi and Mumbai. That’s what makes people change their travel plans. The international sectors have had a noticeable impact since the Omicron outbreak, but it’s now even affecting domestic bookings, âsaid a low-cost airline executive.
In the US in particular, it is a major cause of Cancellation of domestic flights Not the declining travel demand, but hundreds of flight crew members who became infected with Covid, forced the airlines to cancel flights.
Indian service sector activity fell to a three-month low in December, largely due to deterioration in international demand related to the containment of Covid. The purchasing managers’ index (PMI) for services fell from 58.1 in November to 55.5 in December, according to the latest data from analyst IHS Markit. A value above 50 indicates an expansion in economic activity and a value below that indicates a contraction.
âThe underlying data suggests that the recent surge in orders has been concentrated in the domestic market as new business from abroad continued to decline. The deterioration in international demand has been linked to COVID-19 restrictions, particularly on travel … December data showed further job losses in the service economy, but the rate of contraction has been small, “IHS Markit said.
To overcome government restrictions, domestic retailers are demanding equal restrictions on merchants, as restrictions on cities like Delhi can result in “commercial transfers” as customers could easily travel to neighboring countries with fewer restrictions. âThe lack of parity encourages people to go to other cities and do their shopping. Especially for cities and areas bordering other states, said Praveen Khandelwal, secretary general of the Confederation of All India Traders (CAIT). This applies to B2B trade (business-to-business) and not just business-to-consumer trade. Restrictions like odd in Delhi affected the estimated 5 lakh vendors who came to Delhi to buy supplies as they could not make all the necessary purchases on a given day as some stores were closed.
The customer frequency in the main markets of Delhi has decreased due to odd-even constraints As consumers seem to be postponing their purchases, said a handwoven shopkeeper in Gandhi Nagar market in east Delhi.
In the past week, key states such as Maharashtra, Karnataka, Gujarat, Delhi, West Bengal, Haryana and Goa have restricted their economic activities, reduced working hours for shops, restaurants and hotels and the number of people in wedding parties or movie theaters. New restrictions on Tuesday including a A weekend lockdown has been announced in Delhi.
Restaurants that have been 50 percent full since the first phase of the unblock was announced should stay open longer to avoid the rush, said National Restaurant Association of India President Anurag Katriar.
âAlmost all restaurants work with double-vaccinated staff and that in a very strictly regulated environment. All other industries and activities in other areas of life continue undeterred. So maybe restaurant activities are being restricted just for the sake of appearance. We just hope that there will be no knee-jerk reactions from the government and the authorities in the future, âsaid Katriar. A staff member at a restaurant in Kailash Colony, Delhi, said visitor numbers had fallen sharply and the weekend lockdown meant “people almost never get out for lunch and dinner.”
(With inputs from Pranav Mukul)