Ronojoy Dutta, Chief Executive Officer, IndiGo, throws light on various facets of the airline’s business and plans to tackle challenges in the industry. He even discusses issues and challenges affecting the LCC, such as a dearth of pilots and heavy taxation, the latter being a hurdle to the aviation sector’s overall growth, too.
Speaking during a one-on-one session with Peter Harbison, Chairman Emeritus of CAPA, at CAPA Live, Ronojoy Dutta shared that IndiGo expects to recover to 80 per cent of its pre-COVID domestic capacity by the end of 2020 and recover to 100 per cent in early 2021. “The international segment is a bigger challenge. We are only flying 20 per cent of our old (international) capacity due to travel restrictions, with all international services operated as charters or as travel bubble services. We aim to recover to 100 per cent of pre-COVID international capacity by the end of 2021,” he said. Dutta also added that the airline is focusing on six or seven-hour flights with narrow body aircraft for its international network expansion plans.
Most taxed airline in the world While the former United Airlines President does not object to the fact that the Indian government has not provided financial support to Indian airlines “in terms of subsidies and bailouts” similar to what some other governments have done in terms of supporting airlines amidst the impact of COVID-19, he insists that the government should address key longstanding issues.
“The key one is we are one of the most taxed airline in the world. Our fuel taxes are high, our regular fees are high and excise taxes are high. With this high level of taxation, aviation in India really struggles. At some point, I think the government needs to make sure that the overall level of taxation in airlines is reduced,” Dutta said.
India’s largest airline’s top executive also stated that IndiGo is far stronger now than it was before the crisis. Notably, its shares are performing better than they did in January 2020, probably the first airline in the world to see such growth. “I think we passed the eye of the storm in some ways and it should be better sailing going forward,” said Dutta referring to the impact of COVID on the LCC’s cash flow. He added, “If you have survived from a cash flow point of view for the last six months, well, the next six months definitely do look better. We truly are far stronger in terms of product, service, performance, package delivery and digitisation of the customer experience.”
Better equipped now
One of the most talked about issues hampering the fastest growing airline was the lack of pilots. Addressing the issue, Dutta said, “Pilots were a constraint to our growth. Well, about two years ago, we were not only short of pilots, we were also losing pilots because many Indian pilots were getting great offers from places like Middle East and Singapore. Fortunately, as we went through this process, we ramped up our training. We were training pilots at about four times the rate we were before. We put a lot of capacity in place and training really ramped up. Now, we’ve stopped the bleeding issues. We used to lose about 10 pilots a month, which was very painful, but now we don’t. We stopped the bleeding, our training has caught up, so I think that we are in a comfortable position to evolve,” he said.