BUSINESS

IndiGo says its revenue may take a big hit due to COVID-19

Airline cites fall in demand for travel, rupee depreciation

IndiGo, the country’s biggest airline by market size, informed the stock exchanges on Wednesday that the spread of COVID-19 is likely to severely impact its revenues because of a fall in demand for travel.

“Over the past few days... week-on-week, we have seen a 15-20% decline in our daily bookings. Please note that the numbers could change from here based on how the situation evolves. We expect our quarterly earnings to be materially impacted because of the above,” the airline said in its filing to the Bombay Stock Exchange.

Since January, the airline has cancelled its operations to Chengdu, Guangzhuo and Hong Kong in China, as well as reduced its frequencies to several destinations in the southeast Asia.

The airline has told the BSE that while it was able to initially redeploy aircraft freed up to other destinations and protect its revenue from any material harm, it was unable to do so any more as the passenger demand itself had taken a hit in the past few days.

On March 9, Qatar barred entry for Indians as well as citizens from 13 other countries as a precautionary measure against the spread of COVID-19.

Saudi ban

Before that, Saudi Arabia barred non-Saudis from entering the kingdom and suspended the tourist visa for the religious pilgrims to Mecca. This meant that the short-haul international market for Indian carriers to the country's west and east have both been impacted.

In what could be termed a double whammy, the airline also said that the sharp depreciation in rupee would hit the airline and its dollar denominated liabilities primarily because of the large number of planes it has on rent from foreign lessors.

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