38.6c New Delhi, India, Saturday, April 20, 2024

Indigo to Raise Rs. 3,000 Cr. to Rs. 5000 Cr. by Leasing out Assets: Indigo CEO

By Harshil Jain      17 June, 2020 03:37 PM      0 Comments
Indigo to Raise Rs. 3,000 Cr. to Rs. 5000 Cr. by Leasing out Assets: Indigo CEO

On Monday, 15 June 2020, Indigo Chief Executive Officer, Mr. Ronojoy Dutta said in an interview that the private airline company can raise Rs. 3,000 Cr. to Rs. 5,000 Cr, by leasing out its owned assets, including aircraft and engines.

“We own some aircraft, some ATRs, a lot of engines, some A320s,” he said. “We are putting them back on lease. That will give us Rs. 3,000-5,000 crore of funding. I am quite optimistic about the prospects of indigo.”

The chief executive officer also said that indigo will make a purchase of around 120 fuel-efficient neo aircraft over the next two years and will simultaneously retire nearly the same number of A320s. Hence, the capacity of the company will remain stable in the face of the pandemic.

Dutta said, “We have a lot of new planes coming. The terms of new planes are for discussion. (In case of) the old planes, we have obligations and we are meeting them. We are returning 120 old planes, getting 120 or so new planes coming over two years. Those are under discussion.”

The airline has cut its expenses by 30 percent and decided to slash employees’ salaries by 5-25 percent in March. It also implemented a ‘leave without pay’ program in May.

Dutta said the airline plans to focus on the efficiency of the aircraft in use, to reduce costs. The private company is currently operating at 30 percent of its capacity. It is also negotiating agreements with its suppliers for lower costs.

“Our relationship with lessors is a key success factor,” Dutta stated. “We are working with lessors. We are paying all our bills. We are trying to reach an amicable solution with the lessors. We are negotiating terms of new plans with lessors.”

“The environment is hostile, we are doing 30 percent of our capacity, and demand is not there. We want to keep our focus on the cost because if we do not do necessary cost-cutting, the whole company will go down,” he said. “We are taking baby steps at this time; we don’t want to take big plunges into this.”

In another interview, Dutta told that indigo will start international flights, possibly to Gulf countries, by July this year. However, the reopening of international aviation is still not permitted by the Centre.

“Our fixed costs are 40 percent of the system. So, flying 30%-40%-50% of our capacity, there is no way we can cover that and make any profits. We have to have enough planes in the air to cover fixed costs and then we can talk about profitability,” Dutta said.

According to the CEO, indigo wants to expand to 50 percent of capacity, then to 70 percent and finally to 85 percent. He asked the central government to allow airlines to increase capacity. He said the airline believes the best-case scenario for 2021 is passenger travel at 85 percent capacity.

The country’s largest airline has also put on hold all discretionary expenses and has deferred certain CAPEX projects as well. The airline has decided not to pay any dividend this year due to the pandemic.

Share this article:

Leave a feedback about this

Trending Judiciary
SC orders for deciding applications for 'Yatras' during polls within 3 days

Supreme Court orders authorities to decide 'Yatra' applications within 3 days during elections, addressing concerns over blanket assembly prohibitions.

19 April, 2024 04:03 PM
Trending Interview
Big Expose | Aryan Khan Drug Case | NCB | Gyaneshwar Singh

A news report is going viral regarding the Deputy Director General of the Narcotics Control Bureau (NCB), Gyaneshwar Singh. Tarakant Dwivedi alias Akela, a Mumbai-based crime reporter has made big claims over the senior IPS officer's Gujarat visit.

19 April, 2024 05:10 PM


Trending Legal Insiders
Need to safeguard judiciary from unwarranted pressures: 21 ex-judges write letter to CJI

21 ex-judges write to CJI Chandrachud urging protection of judiciary from pressures undermining its integrity and autonomy.

15 April, 2024 12:17 PM
Trending Judiciary
SC notice to ED; declines early date on plea by Delhi CM Arvind Kejriwal against arrest

SC issues notice to ED, declines early hearing on Delhi CM Kejriwal's plea against arrest in liquor scam.

15 April, 2024 03:08 PM
Trending Law School
Call For Chapters: Gender-Based Violence and Religion

Calling For Book Chapters: As an editor, Dr. Amit Anand, Assistant Professor, School of Legal Studies, REVA University, Bengaluru, is inviting people to contribute to a book, entitled "Gender-Based Violence and Religion." This book is scheduled to be published by Cambridge Scholars Publishing.

15 April, 2024 04:21 PM
Trending Top Stories
Cannot stop any public rally, Bombay HC on allegation that Ram Navami processions deliberately pass through Muslim-majority areas

The Bombay High Court calls upon the Maharashtra Police to ensure that no law and order issues occur during a Ram Navami rally in a Muslim-majority area in Mumbai.

15 April, 2024 06:36 PM


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email