Thursday, June 04, 2020

Indigo CEO: Why India Is Uniquely Placed To Come Out Of COVID Strong

India’s largest airline, IndiGo, held its fourth quarter and fiscal year results call this week. While the substantial loss of 8.73 billion rupees ($115m) was to be expected, the general mood in the call was surprisingly upbeat. IndiGo’s CEO, Ronojoy Dutta, was positive about the future, and thinks that Indian aviation is in a great position to recover from the crisis.

Although IndiGo is striving for a fast recovery, it’s under no illusion that there’s a steep hill to climb before it will get back to where it was. During this week’s results call, CEO of IndiGo, Ronojoy Dutta, explained the current situation, saying,

“There’s a lot of dampening effect at the moment … the economy is weak, so even if the customers are willing to travel, the economy is depressing the demand. And then there are restrictions, and all those things are hugely dampening for the traffic, so clearly, we have to work our way through that.”

However, he remained positive about a swift recovery, and explained how he believes India is in a strong position to come out of the crisis.

During the call, Dutta alluded to the uniqueness of India, and the prevalence of Indians to travel. He noted the huge number of people doing what is known as ‘visiting friends and relatives’ travel, or VFR trips. These are often regarded separately in airline traffic data from those which are purely vacations and those which are for business purposes.

Dutta explained how India’s high volumes of VFR traffic would help Indian aviation recover more quickly. He said,

“What is the longer-term sustainability of the airline traffic? India is sort of, I wouldn’t say unique, but an outlier in terms of the VFR traffic. Indians have family everywhere, and they’re like, ‘hey, I don’t care if I die. I want to visit my sister’ or whatever.

“We have a very strong VFR component. People will travel and go to their cousin’s wedding, so I think that VFR traffic distinguishes India from other markets.”
04/05/20 Joanna Bailey/Simple Flying
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