In a step that will help it save costs, the airline now plans to quarterly take stock on its schedule, hiring and fleet expansion.
Faced with the disruption caused by COVID-19 outbreak, IndiGo has changed the way it plans its resources. It has done away with annual plans, and is instead taking stock every three months.
This will effect every aspect of its operations - from planning flight schedule and hiring, to fleet expansion and negotiations with lessors.
Pointing out that airlines all over the world usually make annual plans, CEO Ronojoy Dutta said that the carrier is changing tack. He was speaking to analysts shortly after the country's largest airline announced a loss of Rs 870 crore in its fourth quarter ending March 2020.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
IndiGo had resumed operations on May 25 after two months of grounding due to the nationwide lockdown. While the government has allowed airlines to operate one-third of their summer schedule after the resumption, most of the airlines are operating at lower capacity.
Dutta said the airline is at present operating at 20 percent of its capacity, which will be ramped up to 30 percent and later to 50 to 60 percent. "These are now quarterly decisions," Dutta said.
The airline had announced a pay cut of 5 to 25 percent across its staff - except for those with low salaries - and had also sent employees on leave without pay from May to July. Dutta, however, didn't specify the proportion of employees. He added that all merit-based hikes and allowances have been put on hold.
The airline had added just five aircraft to its fleet in the last quarter of the 2020 fiscal, slowing down from the earlier rate of adding one plane per week. While IndiGo hasn't given a guidance to capacity addition in the present financial year, the focus will be on negotiating better deals with the lessors.
The airline is in talks with its lessors to freeze payment of supplemental rentals. These are payments in addition to the basic rentals.
The Gurugram-based airline is also negotiating with its other vendors to get more favourable terms, and will also not pay dividend for the year. Put together, these steps will help the airline save up to Rs 4,000 crore in the first nine months of the financial year.
The airline, which had recently got an extension from industry regulator DGCA to replace faulty engines in its Airbus 320Neo aircraft, said it plans to return 120 of its A320 Ceo planes in the next two years.
Dutta reasoned that this will help the airline save on high maintenance and fuel costs that the Ceo aircraft incur.
At present the airline has a fleet of 282 aircraft, including 123 ceos and 100 neos. About 40 of the Neo aircraft are at present grounded because of faulty engines.Follow our full coverage of the coronavirus outbreak here