IndiGo expects domestic travel recovery by Oct-Dec
Air travel in India had started to recover from the impact of the pandemic in early 2021. February was the best-performing month for IndiGo since the pandemic hit, with passenger numbers rising to as high as 180,000 a day.
But since March a second, more deadly wave of infections has hit airlines and forced them to raise funds and cut costs.
In a “best case scenario”, IndiGo expects to return to the February 2021 levels by the third quarter (October-December) of the current fiscal year, CEO Ronojoy Dutta said on an analyst call.
Dutta also expects that any meaningful recovery in international travel will now be pushed to the fiscal fourth quarter – January to March 2022.
Interglobe Aviation Ltd, which runs IndiGo, reported its fifth straight quarterly loss on Saturday and has plans to raise up to 30 INR billion (USD 412 million) to strengthen its balance sheet.
It also plans to raise an additional USD 618 million of liquidity during the year through credit from banks and sale and leaseback of aircraft, CFO Jiten Chopra told analysts.
The company’s cash burn increased to USD 2.6 million a day in the March quarter from around USD 2 million a day in the December quarter. It expects this to rise further in the June quarter, Chopra said, without giving details. The group’s fiscal year runs from April to March.
CEO Dutta said that while the carrier expects revenues to be impacted in April and May due to travel disruptions amid lockdowns, the airline has started to see a steady pick up in passenger numbers and expects an improving revenue trend for the rest of the year.
“We are hopeful that with the reducing trend in COVID cases and increased pace of vaccinations, passenger confidence and airline traffic will gain further momentum,” he said. (Source: Reuters)