Indigo Aims to Operate Flights at 70 Percent Capacity By Year-End Amid Covid-19 Crisis

IndiGo aims to operate 70% of its pre-COVID-19 flights by the end of this year, its CEO Ronojoy Dutta on Monday said, adding that resuming international passenger services in July would be a "good idea".

The Centre should allow the airlines to operate 50% of their pre-COVID domestic flights now, Dutta said, while expressing hope that the limits imposed on airfares would be removed in August as promised by the government.

India's largest airline IndiGo operated around 1,500 daily flights in the pre-COVID era. Around 20-25% of these flights were on international routes while the remaining operated domestically.

The Centre resumed domestic passenger flights from May 25 after a gap of two months amid the coronavirus pandemic. However, it allowed airlines to operate only 33% of their pre-COVID flights and imposed lower limits and upper limits on airfares as per the flight durations.

Civil Aviation Minister Hardeep Singh Puri had on May 21 said that the limit on airfares will be in place till August 24.

Dutta said, "We are at 30% (of pre-COVID traffic) now. We would like the government to take it to 50%. We will pause and see what happens. Because the traffic has to be profitable otherwise it is not worth it. And at that point, we would like to take it to 70% by the end of the calendar year."

"I think Mr Puri is talking about opening international traffic in July, and I think that is a good idea, and he should follow that...I think that the lockdown needs to be eased," he added.

Puri had said on June 7 that India will take a decision on resumption of international passenger flights as soon as countries ease restrictions on entry of foreign nationals.

On fare limits imposed by the government for domestic flights, Dutta said, "It is good for the government to try different things under this crisis because no one knows what the real answer is. So it is good to do a lockdown, it is good to set up a 30% capacity, it is good to put a fare cap of some kind just to see all this works out until more data becomes available."

"Now that we have seen all this, we need to move to the next step. We need to ease the lockdown, take the 30% up to 50%. The government was afraid that there might be some huge spike in fares and that has not happened. They have promised to take it off (fare limit) in August and I hope they will do that," Dutta noted.

The CEO mentioned that IndiGo started with around 240 flights on May 25 and is now operating about 350 daily flights.

"So, the capacity is up. Our passenger loads are up. Our unit revenue has gone up. And just as importantly, future bookings are up. Everything is pointing in the right direction," he added.

The strongest demand we are seeing is on flights connecting metro cities to non-metro cities, the CEO said.

"A lot of traffic goes to the east. But it is not as if Delhi-Patna flight is full and Patna-Delhi flight is empty. It is good in both directions, but is clearly stronger in one direction," he explained.

He mentioned that there is less corporate demand as people are preferring to meet via video conferencing on Microsoft Teams, Zoom application.

"But the demand at the bottom end (the one that comes from leisure travellers) is good. And the pricing is also very good. So we are very encouraged by it," he added.

The CEO mentioned, "I think that is a long term trend. Traffic at the top end (corporate traffic) will have less demand. If people were flying on Delhi-Mumbai three times a month, they would now do it two times a month or one time a month. On the other hand, they will rely on technology like Zoom."

The aviation sector globally has been hit extremely hard because of the travel restrictions imposed by the countries in view of the COVID-19 pandemic.

Dutta said that IndiGo, in order to reduce its expenses, will return all 120 A320ceo aircraft within the next two years as they have high maintenance costs and higher fuel burn.

He added that the airline would be taking delivery of "a lot of" newer generation A320neo aircraft during the same time period, but they would not replace all outgoing A320ceo planes in a one-to-one ratio.

"We have decided for the next two quarters to take around 30 of them (A320neos). Beyond that we will pause and see," Dutta noted.

As on March 31 this year, IndiGo had a total of 262 planes in its fleet.