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India’s largest domestic airline said it is raising more than $1 billion in funding to prepare for the third wave of Covid-19 infection, while at the same time, a brutal nationwide epidemic is beginning to recede.
Ronojoy Dutta, CEO of IndiGo’s parent company InterGlobe Aviation, told the Financial Times that he hopes the airline’s business will return to pre-pandemic levels by the end of the year, but warned that another The wave of coronavirus November may cause more disturbances.
The budget airline plans to raise 30 billion rupees ($410 million) through a qualified institutional placement (an equity financing tool used in India) to prepare for the worst. IndiGo also plans to obtain approximately US$600 million in funding through bank credit and aircraft sales and leaseback.
“The doctor tells us that there will be a third wave. There are no assumptions about it and, however, it may appear around November or December,” Dutta said.
“The board said,’Look, the environment is unstable… If we shut down for another three months, what will happen? Zero income? We are establishing insurance for this catastrophic situation,” he added.
Coronavirus cases in India have been steadily declining after peaking in mid-May, although the country set a global record of more than 6,000 deaths per day in a single day this week, partly because Delta variant First in China.
However, there are still about 100,000 cases reported every day, and many countries have issued Travel restrictions For passengers from India.
Before the surge at the beginning of the year, Prime Minister Narendra Modi (Narendra Modi) Downplay the threat And claimed that the country has controlled the virus.
As the second wave of the epidemic subsided, New Delhi adopted a more cautious approach to information transmission, issuing warnings to the third wave of epidemics and expanding vaccination efforts.
India’s aviation industry has always receive punishment Due to regional blockades across the country. IndiGo’s passenger capacity From 80% in February to 30% in mid-May.
InterGlobe, which has a market share of more than 50%, reported a fifth consecutive quarter of losses this month.
However, Duta said the third wave is unlikely to occur As harmful as the second one. “as long as [India keeps] Approximately 700,000 people are vaccinated every day. .. This will be a very flat wave,” he said.
He also expects IndiGo to benefit from Indians taking “retaliatory holidays” after being confined at home for several months, adding that the company has added new routes to holiday hotspots such as the Maldives.
Duta said that the pandemic “regressed India at least two or three years.” “But we will catch up… I am confident in India’s growth story.”
His cautious optimism is in stark contrast to the recent boom in the Indian stock market that has been hit. A record high.
The World Bank lowered India’s growth forecast for this year from 10.1% to 8.3% and blamed it on the second wave of coronavirus.
Madan Sabnavis, chief economist at Care Ratings, said: “The recovery will begin in August. For three months, many states are still in a virtual lockdown.”
“Now it can almost be assumed that there will be a third wave, so there will be better preparations,” Sabnavis added. “The script is more or less fixed.”
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