SINGAPORE — Indian low-cost carrier IndiGo’s international operations may be struggling, but the division could make a full recovery by the end of the year, the airline’s chief executive told CNBC this week.
Ronojoy Dutta of IndiGo, which is operated by InterGlobe Aviation, said the split between domestic and international segments for the airline has been a “tale of two cities.”
Domestic recovery has been strong, while international recovery has “all the challenges of Covid and testing and quarantine,” he told CNBC’s “Street Signs Asia” on Monday.
The country last week extended a ban on international commercial passenger flights until the end of February. Local travel was allowed to resume in May.
IndiGo is a low-cost carrier that primarily operates internal flights, and is India’s largest passenger airline.
Aircraft operated by Go Airlines Ltd. and IndiGo, a unit of InterGlobe Aviation, stand at Terminal 3 of Indira Gandhi International Airport in New Delhi, India, on Sunday, June 28, 2020.
T. Narayan | Bloomberg | Getty Images
“We are struggling at only 28% of our pre-Covid capacity,” he said of international flights. However, domestic operations have reached 80% of pre-pandemic levels.
“I think we should be at 100% of domestic capacity by April at the latest,” Dutta predicted. “International will open slower, but by the end of calendar year 2021, we should be at pre-Covid levels internationally as well.”
That projection is more optimistic than that of other airline executives. AirAsia CEO Tony Fernandes told CNBC that passenger capacity is unlikely to reach pre-coronavirus levels until 2023.
Emirates President Tim Clark in November said the carrier is eyeing a return to profitability in 2022.
IndiGo’s Dutta is also positive about the airline’s outlook after the coronavirus situation ends.
“Once the pandemic crisis is behind us, we see lots of opportunities for growth,” he said.
He said India has very low air travel penetration and that there will be a “huge amount of pent-up demand” when the economy recovers.
“International is [an] even brighter picture,” he said, adding that profit margins for international flights are higher.
Dutta said he sees “lots of room for growth” for travel to and from countries within a six to seven hour flight from India such as Russia, Egypt, Malaysia and China.
“We are very excited about those growth prospects, and as you know, we have a big fleet expansion coming,” he said. “I’m just itching to get to 2022 and [to] keep growing rapidly.”
— CNBC’s Saheli Roy Choudhury, Dan Murphy and Emma Graham contributed to this report.