Thursday, July 19, 2018

IndiGo plans to fly low on sale-and-lease-back model

The cash-flush IndiGo, country's largest airline in terms of market share, has begun going easy on 'sale-and-lease-back' model with its cost of aircraft ownership heading North.

In the last fiscal, the low-cost carrier (LCC) acquired six ATR aircraft out of its free cash, which it believes will help in bringing down the operating cost in the highly price-sensitive Indian market.

The management had last year indicated that it will be bringing some changes in its aircraft acquisition strategy, though it will not completely discard the sale-and-lease-back model.
From Rs 3,296.51 crore in the financial year (FY) 2017 to Rs 3,550.14 crore in last fiscal, IndiGo's aircraft ownership cost has increased 7.7%. In the same period, its total cash rose 46.7%, the company said in its annual report on Wednesday.

According to the analysts, the changing strategy is important considering the fact that IndiGo, which has been among the most profitable airlines for the past several years in the country, has been more of a pusher for sale-and-lease-back model.
19/07/18 Shahkar Abidi/DNA