IndiGo hopes to reach pre-Covid level of traffic by 2nd quarter of next year: CEO

New Delhi: IndiGo is hoping to reach pre-Covid level of total traffic, including domestic and international, by the second quarter of next year, said its CEO Ronojoy Dutta on Wednesday.  The carrier is currently operating around 40% and 30% of its pre-Covid domestic and international flights, respectively, and it does not plan to lay off any employees this year, Dutta told PTI in an interview.

In July last year, India’s largest carrier had laid off 10% of its workforce due to the coronavirus-induced economic crisis. IndiGo was operating 80% of its pre-Covid domestic flights in February before the second wave of the pandemic hit the country. Dutta said the traffic fell in April and May.

“It bottomed out on May 18 and at that point, we had gone down from 1,200 departures to about 400 departures. That is how bad it was. Since then, we have started recovering. From May 18 to June 6, the numbers (of passengers) are picking up nicely,” he stated.  The domestic growth observed post-May 18 tells us that the hesitancy, which was observed among air passengers during the first Covid-19 wave regarding air travel, is no longer there, he added.

Dutta said there is a structural shift and the carrier has seen faster growth in Tier-2 and Tier-3 cities of the country in the last one-and-a-half year.

“About 45% of our total deployed capacity (total domestic flights) was in Tier-2 and Tier 3 cities (in pre-pandemic era), which has increased to 65% right now,” he mentioned.

“Is this temporary? I do not know (for sure) but I don’t think it is temporary. I think with the manufacturing and trading and so forth, there has been a faster growth in Tier-2 cities than Tier-1 cities,” he stated.

In the last one-and-a-half year, cities such as Patna, Ranchi, Coimbatore have seen faster growth than the others, he said.  “It all points to Tier-2 cities growing faster than the Tier-1 cities,” he added.

Dutta said states should remove their quarantine and testing requirements for all domestic air passengers by June-end.

“Now, we are 1 lakh Covid cases and below, and the numbers are dropping rapidly. Most of these lockdowns are being removed by different states by June 14, June 18, etc. In any case, by the end of June, I hope all these restrictions are gone and we are just flying again as is the case in the US and Europe, where all these state-wise restrictions have been lifted,” he mentioned.

“Once the number of cases drop below a certain level, as it did in February, why do we need these restrictions domestically?” he questioned.

When asked if ‘vaccine passports’ — allowing fully vaccinated people to travel without restrictions — is the way forward to boost International traffic, Dutta said, “There are various complexities and scenarios on this issue and I do not want to comment on it other than to say that the best way to do it is through the IATA (International Air Transport Association).”

The IATA is a global airlines body with around 290 members that comprise more than 80% of global air traffic.  “All airlines, including us, are giving our view to the IATA and it is supposed to come up with one standard recommendation to all governments (regarding vaccine passport). So, we have agreed as airlines that let the IATA come up with one definite proposal. What is worse is if three governments have three different proposals,” Dutta said.

At a G7 meeting of health ministers on June 4, Union Health Minister Harsh Vardhan expressed India’s “concern and strong opposition” to allow vaccine passports for international travel at this juncture of the pandemic as it could prove to be highly discriminatory against developing countries where the percentage of vaccinated population is low.

From June 1, the Centre has permitted the carriers to operate not more than 50% of their pre-Covid domestic flights instead of 80% allowed before. “We believe that we need to remove this cap or take it up to 80%,” Dutta stated.

At this point, the carrier is planning to reach 50% of its pre-Covid domestic capacity by July-end, he said.

“By year-end, we expect to be above 80-85% domestically. Overall, if you combine domestic and international, we hope to be at pre-Covid levels by the second quarter of next calendar year (which is the first quarter of next financial year),” he noted. He said the government should also remove the upper and lower limits placed on domestic airfares.

IndiGo and its ground handling subsidiary Agile has lost 17 and five employees, respectively, till date due to Covid-19, he said. To assist employees incase they contract Covid, the airline has created 18 hospital beds in Gurgaon and Chennai for employees.

The carrier has signed up with ambulance companies so that it is available within half an hour if an employee calls. Moreover, it has a system in place where people deliver food or medicines to the home of the infected employee.

When asked if the company plans to lay off any employees this year, he said, “You can say that the situation is not that serious this time and we have no plans for any lay offs.” IndiGo on May 31 had said senior employees will have to go on compulsory leave without pay (LWP) for up to four days per month till September as passenger traffic has reduced due to the second wave of the Covid-19 pandemic.