IndiGo Warns of 60% Capacity Slump After Loss on Virus
(Bloomberg) -- IndiGo, India’s biggest airline, warned capacity will slump by 60% in the three months ending Sept. 30, , as the coronavirus pandemic continues to slam the global aviation industry.
The airline, operated by InterGlobe Aviation Ltd., said “the aviation industry is going through a crisis of survival.” IndiGo had a total cash balance of 184.5 billion rupees as of June 30, and total debt of 235.5 billion rupees, it said in a statement to stock exchanges Wednesday.
- Indigo expects 2Q available seat kilometers, an industry term for passenger capacity, at about 40% of year ago period.
- IndiGo in the process of raising an additional 20 billion rupees by selling-and leasing-back assets, Chief Financial Officer Aditya Pande says in analyst call. Employee costs for the year ending March 31, 2021 is expected to be 30% lower than pre-Covid levels, Pande says.
- The airline will return more older planes to lessors this year, compared with new deliveries, Chief Operating Officer Wolfgang Prock-Schauer says in the call.
- IndiGo lost 28.5 billion rupees ($380 million) in the three months through June, compared with a net profit of 12.03 billion rupees in the same period a year earlier. IndiGo posted a loss of 8.7 billion rupees in the three months through March 2020, its fourth quarter.
- Yield -- a measure of airfares -- rose 11% to 4.53 rupees. India grounded all flights for most of April and May to check the spread of the coronavirus. Since then, the government has allowed airlines to fly less than half of their schedules and capped fares.
- The airline is the biggest customer for Airbus SE’s best-selling A320neo jets
- Like many other airlines all around the world, IndiGo is also reducing its workforce and lowering salaries for highly-paid staff. It will consider raising more funds via bonds or shares on Thursday.
- IndiGo shares closed 0.5% down at 909.75 rupees Wednesday in Mumbai, before financial results were announced. They have fallen almost 32% so far this year.
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