 "indigo")
IndiGo, India’s largest airline, plans to pause plans until 2023 end as it recoups from the impact of the coronavirus and it aims for 25 per cent annual growth later.
The airline owns 274 aircraft and it has ordered for more 525 Airbus A320 Neos and A321 Neos. While the airline will not slow down induction of new aircraft, most of those will be to replace more than 100 older A320 Ceo aircraft and hence the total fleet count will remain static.
“Our growth prospects are well reflected in our fleet plan with growth muted for the next 24 months, but then accelerating to a 25 percent growth rate per annum. We have incurred large losses during the COVID period and have been forced to take on a large amount of debt to fund our cash burn. Repairing our balance sheet is an urgent task,” said Ronojoy Dutta, chief executive officer of IndiGo, wrote to employees in a year-end note reviewed by 'Business Standard’'.
India’s domestic passenger growth has almost returned to pre-pandemic levels as people travel for year-end holidays amid an uptick in cases of the Omicron coronavirus variant. On Saturday, airlines carried 3,70,145 passengers: a 92 percent recovery of 4 lakh passengers that Indian airlines carried daily before the pandemic.
However, international reopening has been postponed by the government impacting growth plans of Indian airlines like IndiGo which before COVID planned to deploy 25 percent of its capacity on international routes.
However, Dutta said that the airline is eyeing international expansion in a big way as competition heats up in the domestic sector.
While finances of IndiGo’s rivals remain fragile impacting their growth plans, there will be entry of a new low-cost airline Akasa which is backed by billionaire investor Rakesh Jhunjhunwala. Simultaneously, salt to steel conglomerate Tata Sons will pump in more money into their aviation ventures as the group looks to consolidate after the takeover of Air India.
IndiGo is eyeing to launch new international routes particularly to thin markets in Europe and Africa like Moscow, Barcelona, Nairobi after it gets the long- range aircraft Airbus A321 XLR in its fleet by early 2024. Analysts tracking the company said the airline’s international plans may also benefit due to the weakening financial positions of many of IndiGo’s rivals in the region like low- cost behemoth AirAsia in Malaysia.
“We note that international leisure travel by Indian travellers at 12 percent of pre-Covid levels where Indian carriers had a 40 percent market share. Such traffic completing shifting to domestic can lead to the seven percent boost to the market size for Indian carriers,” brokerage firm Kotak institutional securities wrote in a note to clients.
