Indigo plans full capacity domestic flights by Dec, seeks to raise funds

CEO Ronojoy Dutta says airline's cash levels are 'pretty good' but it wanted an insurance buffer against a possible third wave of Covid-19.

IndiGo, one of Asia’s biggest budget airlines, is aiming at running at full capacity domestically and is targeting just over two-thirds in international routes as the virus pandemic eases and people start traveling more.

“Things are improving slowly,” Chief Executive Officer Ronojoy Dutta told Bloomberg Television’s Rishaad Salamat and Haslinda Amin on Friday, adding that it was “hard not to be bullish as traffic is going up.” 

He said the current load factor for the airline is around 70% and yields are likely to rise in coming months.

Current cash levels were “pretty good,” Dutta said, though he added that the company wanted to raise funds as an insurance buffer against a possible third wave. India’s air travel recovery could turn out to be short-lived as forecasters predict a new Covid wave may peak in October. India has suspended international flights until Sept. 30 and limited the passenger capacity on domestic services to 72.5% of pre-pandemic levels.

The carrier, operated by InterGlobe Aviation Ltd., posted a loss of 31.8 billion rupees in the three months ended June 30, worse than a loss of 28.5 billion rupees a year earlier. IndiGo had imposed compulsory leave-without-pay for all its employees as passenger traffic plunged to near zero due to the deadly second Covid wave that hit India between March and May.

To combat the cash drain, Indian carriers have been raising funds. IndiGo in May said it’s considering raising 30 billion rupees by selling shares to large investors after it shelved the plan in January, saying back then that internal sources of cash would be sufficient as demand started to recover.