IndiGo chief Ronojoy Dutta has said the private airline wasn’t expecting to turn a profit and was negotiating terms of new planes with lessors, underscoring the stress the aviation industry faces.
Talking to CNBC-TV18, Dutta also expressed hope that the government would lift the cap on airfares by August, saying the airline was trying to cover variable costs and still fly but it would not be able to meet all leasing expenses.
"Urging the government to lift travel restrictions on international flights as soon as possible," Dutta, who is the Chief Executive Officer (CEO) of InterGlobe Aviation, which operates budget carrier IndiGo, told the news channel.
The government allowed domestic flights to resume on May 25 after a gap of two months but capped ticket prices. International flights are likely to take time as flying restrictions are in place in several countries.
"Best guess is Attaining 85 percent capacity by next year," Dutta said.
The airline would be able to cover fixed costs only with 100 percent utilisation, which at present was only at 30 percent, Dutta said.
The current situation demanded course-correction, said Dutta. “We really need to open up economy more sooner than later. We now see consequences of lockdown,” he said. It was hurting the job situation and young parents with young children were impacted.
India’s biggest airline and other air carriers had last month cut salaries, as severe cash crunch hit their businesses.
Dutta said the airline was negotiating terms on new planes with lessors.
"We will return around 120 planes in two years and around 120 new planes will join," he said.
IndiGo were working with lessors to reach an amicable solution and was looking to making its fleet more efficient.
He added that the company did not have any debt on its balance sheet, except for its lease obligations.
According to Dutta, air travel is becoming more affordable than earlier.
"Airlines will be more cost competitive with railways going ahead," Dutta said.
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