India's top airline IndiGo to raise at least $268mln via leaseback

Indigo temporarily halted operations in March when India began a two-month lockdown

  
The logo of IndiGo Airlines is pictured on passenger aircraft on the tarmac in Colomiers near Toulouse, France, July 10, 2018. Image used for illustrative purpose.

The logo of IndiGo Airlines is pictured on passenger aircraft on the tarmac in Colomiers near Toulouse, France, July 10, 2018. Image used for illustrative purpose.

REUTERS/Regis Duvignau

BENGALURU/NEW DELHI - IndiGo, India's largest airline, said on Wednesday it planned to raise at least 20 billion rupees ($268 million) through the sale and leaseback of planes and other assets, after reporting its steepest quarterly loss in at least five years.

Chief Financial Officer Aditya Pande said the airline, owned by Interglobe Aviation Ltd, would consider raising even more than 20 billion rupees and the board would meet on Thursday to discuss this.

"Managing cash continues to remain our primary focus and we continue to work with all our stakeholders to raise liquidity," Pande told analysts on a call, adding it was in advanced talks on selling and leasing back some of its unencumbered assets.

Pande did not say how much additional cash the airline could raise on top of the 20 billion rupees announced on Wednesday.

Airlines globally are looking for ways boost their finances after the coronavirus crisis kept travellers at home. The airline industry body IATA forecasts passenger traffic will not return to pre-crisis levels until 2024.

Indigo temporarily halted operations in March when India began a two-month lockdown, at a time when the carrier was already grappling with higher maintenance costs and weak demand. It has been slowly rebuilding its schedule.

Rival Indian carrier SpiceJet said it had deferred payments to vendors and statutory authorities, and was renegotiating some contracts, particularly with aircraft lessors.

IndiGo, which reported a net loss of 28.49 billion rupees in April to June compared with a 12 billion rupee profit a year earlier, said last week it would cut 10% of its workforce. 

The airline reduced its daily fixed cash burn to 300 million rupees in April to June from 400 million rupees in the previous three months, Pande said, adding it expected to end the year with 30% lower employee costs.

IndiGo expects to operate about 40% of its average seat capacity from July to September compared with the same period a year earlier and 60% to 70% in the following quarter, if rules allowed, Pande said.

(Reporting by Chandini Monnappa in Bengaluru and Aditi Shah in New Delhi; Editing by Aditya Soni and Edmund Blair) ((Chandini.M@thomsonreuters.com; +918061822697;))

More From Business