IndiGo, India’s largest airline, is amassing a $1 billion war chest in preparation to weather a third wave of COVID-19. The airline’s plans come as daily cases in the country continue to decline following a devastating second wave. Nonetheless, CEO Ronojoy Dutta expects the airline’s operations will recover to pre-pandemic levels by the end of the year.
According to a Financial Times storey, the budget airline wants to raise $410 million via a qualified institutional placement (QIP) to prepare for the worst-case situation. Additionally, it intends to raise $600 million through bank credits, aircraft sales, and leasebacks.
According to Dutta, there are no ‘ifs and buts’ regarding the third wave. He claimed that doctors have been warning about the upcoming wave, which is expected to occur between November and December.
“The board says ‘look, the environment is volatile…what if we go for another three months’ shutdown, then what?’ And the revenue is zero? It’s for that sort of disaster scenario that we are building insurance,” said Dutta to the media.
While Dutta is worried about the third wave, he feels it is unlikely to be as destructive as the second. He asserts that as long as India continues to vaccinate approximately 7 lakh people daily, the third wave will be extremely flat.
The IndiGo CEO is also anticipating’revenge vacations’ that Indians are expected to take following months of being locked up at home. Dutta anticipates that it will benefit the airline. Indeed, IndiGo has introduced new destinations in tourist areas like as the Maldives.
Dutta told the media that the pandemic has set India back at least two-three years. “But we’ll catch up…I have great faith in the Indian growth story,” he added.
Smrutirekha Bhoi