Battered by the Covid-19 pandemic, India’s aviation sector relies on sustainability for the road to viability among airports and airlines. Here’s what works, what doesn’t.
IndiGo reported a staggering loss of ₹3,174 crore for the first quarter, impacted severely by the pandemic. However, from July onwards it has started to see a measured recovery in passenger demand.
With the decline in the second wave of the pandemic, passenger confidence in air travel is on the rebound. Starting October, though, is when traffic numbers could gain momentum, says IndiGo.
United Airlines, Air Canada, US Airways, and Air Sahara were Ronojoy Dutta’s stamping grounds, before IndiGo. Since then, it hasn’t been clear blue skies for the man. He now sees tailwinds emerging.
Even as the Tata group doubles down on its aviation bets, IndiGo is also preparing ground for its next stage of growth. It’s on a mission to build the best airline system for India, says its CEO.
With free cash reserves of over ₹9,000 crore, the airline has decided to pay heed to the government’s wish of not reducing pay for employees during the lockdown; it had announced pay cuts earlier.
The airline’s CEO Ronojoy Dutta is taking a 25% cut in salary, while all other employees will have to take a pay cut ranging between 5% and 20%; Employees in bands A and B are exempted.
Better ticket yields, higher passenger growth, and lower fuel costs helped the airline post a profit of ₹496 crore compared to a loss of over ₹1,000 crore in the previous quarter.
Higher aircraft maintenance costs, employee expenses, and mark-to-market losses on capitalised operating leases drag the airline further into the red in a seasonally weak travel period.
