The Impact of COVID-19 on Indian Aviation Industry
After seeing a huge cutdown in sales revenue in 2020 due to global lockdowns for the COVID-19 pandemic, the aviation industry surely suffered a huge loss. In the domestic market, along with the others, Indigo Airlines also suffered a whole lot. They posted a record quarterly loss of ₹ 1,195 crore. Their year-on-year debt also increased by a whopping 28%.
How Indigo Airlines Is Catching Up?
Last year, the board of directors at Indigo had agreed on selling shares in order to make up for the losses. They opted to raise up to ₹4,000 crore through ‘qualified institutional placement’ (QIP). Within a month, the restrictions slacked a bit, and air travel resumed. The aviation industry saw some improvements in financial conditions. This made the officials at Indigo go over the decision and rethink it all over again.
This year, after analyzing the conditions, they scrapped the plans to utilize QIP and in turn, sought after ‘sale and lease back’ (SLB) and other alternative options.
Indigo, the Pioneers of SLB Transactions in India
Indigo is one of the best when it comes to SLB interactions in India. It will involve selling the aircraft to the buyers and then take them back on lease. This will result in the removal of debts associated with the aircrafts from the carrier’s bills whilst being able to use them for normal runs. This will surely help in making up for the losses and keep up with the market.
Indigo was rated as ‘The Safest Domestic Airline during COVID-19’. The authority hopes to return back to run at pre-COVID capacity by 2021-end if situations get better with time.
Written by - Priyam Tahabilder
Edited by - Prachi Raheja
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