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Indigo eyes a return to 80% flight capacity, says will not delay aircraft deliveries

Indigo eyes a return to 80% flight capacity, says will not delay aircraft deliveries

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Indigo
Indigo was Airbus’ largest customer in 2020, adding 44 A320/21neos to its fleet last year.
Image Credit: Reuters

Dubai: Indigo has not deferred the delivery of new aircraft from Airbus and ATR even as the pandemic forces airlines around the world to re-think their future strategies.

“We have not actually delayed or deferred any orders from the manufacturers – Airbus and ATR,” said William Boulter, Indigo’s Chief Commercial Officer, during a CAPA (Centre for Aviation) event on Wednesday.

Indigo was Airbus’ largest customer in 2020, adding 44 A320/21neos to its fleet last year.

“We find that receiving these aircraft as scheduled helps with our fuel bill – we’re taking the A320/21neos and the improvement in fuel burn is around 15 per cent, which obviously assists in greatly reducing our cost per available seat kilometer,” said Boulter.

Aiming for 80 per cent

India recently allowed airlines operating in the country to operate at 65 per cent capacity, up from 50 per cent.

Indigo’s Boulter is hopeful that the low-cost carrier will return to the 80 per cent capacity seen in February and March. “We do see demand has come back – some observers think it’s coming back faster than it did after the first wave… we look forward, optimistically”

Apart from the limits on flight capacity, India’s aviation regulator has also placed caps on domestic flight fares. This has not gone down well with airlines.

“We’ve made it clear that we would like to get back to 100 per cent capacity and we would like to see the price limits removed,” said Boulter. “We would obviously like to get back to the situation as it was in 2019”

Retiring planes

With the pandemic, airlines are retiring older, less fuel efficient aircraft. Indigo is no exception.

The Indigo executive declined to comment on the number of aircraft retired, calling it “commercially sensitive.”

“Our focus right now is just right-sizing the fleet towards the demand, which is now picking up again,” said Boulter.

He added that returning the aircraft to lessors has been “very challenging” in the current market.

Big changes

With or without the crisis, India’s aviation sector has been going through massive changes. Flagship carrier Air India is in the process of being privatized, while former market leader Jet Airways is seeing a possible return to skies after being acquired by a consortium last year.

All these developments have made investors and industry insiders wonder if Indigo would be able to hold on to its crown.

“We are absolutely consistent (and) will continue growing – what others do is not of much concern to us,” said Boulter.

Since the airline’s founding in 2005, “we’ve seen airlines come and go” and “we will continue to be focused on our own growth,” he added.

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