Industry

‘Overseas route curbs impairing profitability’

IndiGo owner Interglobe Aviation Ltd. on Thursday said the continued curbs on international commercial operations were proving to be a hurdle to the airline’s return to profitability.

“The low level of international capacity continues to remain a major concern for us, and continues to hurt our financials,” said CEO Ronojoy Dutta, after the company reported a third-quarter net loss of ₹620 crore. “We are anxious to get back in a big way into the international game,” he added.

Interglobe

The airline reported a net loss of Rs 620 crore for the quarter ended December, recovering from its loss of Rs 1,194 crore the previous quarter with the government allowing more flight capacity in the market and a gradual pick-up in demand, especially in “tier-1 and tier-2 cities where the demand has surpassed pre-COVID levels.”

India has only partially resumed international air operations, which are in the form of “air bubbles” with 24 countries. The arrangement entails direct travel between two countries on a limited number of flights. IndiGo said that it is currently able to operate only 28% of its total international capacity.

On the domestic front too, the airline was able to operate only 70% of its pre-COVID capacity in December because of a cap by the government, “which is a drag on our aircraft utilisation and although the flights we are operating are contribution positive, we are not able to offset all our fixed costs. We are hopeful that the government will see fit to remove the capacity restriction in the near future to support the ongoing recovery,” said Mr Dutta

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Printable version | Jun 17, 2021 12:06:23 AM | https://www.thehindu.com/business/Industry/overseas-route-curbs-impairing-profitability/article33687043.ece

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