The Indian government’s imposition of a lockdown on March 25 to contain the spread of Covid-19 has hit the economy hard. One of the most badly affected sectors is the airline industry.
The country’s leading airline by market share, IndiGo, on Tuesday reported a net loss of 8.7 billion rupees (US$ 116 million) for the fourth quarter (Jan to March) of FY20. It had posted a profit of 5.89 billion rupees ($78.5 million) in the year-ago quarter and 4.96 billion rupees ($66 million) in the previous quarter.
For the full fiscal year, the airline incurred a loss of 2.33 billion rupees ($31 million), as against 1.57 billion rupees ($21 million) in the previous fiscal. The budget airline said it has been badly hit by the lockdown and refused to provide any growth guidance.
However, IndiGo is better placed to endure the pandemic than other smaller airlines as it has a cash reserve of nearly 204 billion rupees.
With a fleet of 262 aircraft, the airline resumed its services last week at 20% capacity and hopes to increase it soon to 30%. However, its flights are often disrupted due to passengers being infected with Covid-19.
As per the safety protocols, once an infected person is identified, the aircraft has to be disinfected, the operating crew have to be home quarantined, and all passengers have to be notified.
The company’s CEO, Ronojoy Dutta, is hoping the government will soon allow international flights, as the yields are better than they are with domestic services.
The airline also faces technical problems caused by the Pratt & Whitney engines fitted in its Airbus A320/21 Neo aircraft. The airline has over 110 such aircraft and their engines were to be replaced by May-end.
However, the Directorate General of Civil Aviation has extended the deadline to August 31. The engine replacement work has been affected by pandemic-related travel restrictions.
Indigo had landed in controversy because of its flip-flops over salary cuts. On March 19, it announced that it would cut salaries, but on April 23 decided to change its stance in deference to the “government’s wishes.”
But in the first week of May it decided to implement the “originally announced pay cuts” from May onwards. The cuts range between 5% and 25%, and senior employees have been told to go on leave without pay from May to July.