IndiGo to raise $268 mn via sale, leaseback of planes and other assets

Airlines globally are looking for ways boost their finances after the coronavirus crisis kept travellers at home

In fight for IndiGo, Bhatia appears to have pushed out partner Gangwal — The airline industry body IATA forecasts passenger traffic will not return to pre-crisis levels until 2024

Chandini Monnappa & Aditi Shah | Reuters Bengaluru/New Delhi

2 min read Last Updated : Jul 29 2020 | 9:39 PM IST

IndiGo, India's largest airline, said on Wednesday it planned to raise at least Rs 2,000 crore ($268 million) through the sale and leaseback of planes and other assets, after reporting its steepest quarterly loss in at least five years.

Chief Financial Officer Aditya Pande said the airline, owned by Interglobe Aviation Ltd, would consider raising even more than Rs 2,000 crore and the board would meet on Thursday to discuss this.

"Managing cash continues to remain our primary focus and we continue to work with all our stakeholders to raise liquidity," Pande told analysts on a call, adding it was in advanced talks on selling and leasing back some of its unencumbered assets.

Pande did not say how much additional cash the airline could raise on top of the Rs 2,000 crore announced on Wednesday.

Airlines globally are looking for ways boost their finances after the coronavirus crisis kept travellers at home. The airline industry body IATA forecasts passenger traffic will not return to pre-crisis levels until 2024.

Indigo temporarily halted operations in March when India began a two-month lockdown, at a time when the carrier was already grappling with higher maintenance costs and weak demand. It has been slowly rebuilding its schedule.

Rival Indian carrier SpiceJet said it had deferred payments to vendors and statutory authorities, and was renegotiating some contracts, particularly with aircraft lessors.

IndiGo, which reported a net loss of Rs 2,849 crore in April to June compared with a Rs 1,200 crore profit a year earlier, said last week it would cut 10% of its workforce.

The airline reduced its daily fixed cash burn to Rs 30 crore in April to June from Rs 40 crore in the previous three months, Pande said, adding it expected to end the year with 30% lower employee costs.

IndiGo expects to operate about 40% of its average seat capacity from July to September compared with the same period a year earlier and 60% to 70% in the following quarter, if rules allowed, Pande said.