IndiGo is looking for ‘wet lease’ aircraft to meet travel demand | Tech US News

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November 5: Indian airline IndiGo plans to ‘lease out’ planes to meet growing demand for air travel. InterGlobe Aviation Ltd, the operator of IndiGo, has decided to go for ‘wet lease’ of the planes as the supply chain disruption may cause delays in the delivery of new planes.

A “wet lease” arrangement is one in which the lessor maintains operational control of the flights while providing aircraft and crew.

Reporting a loss in the second quarter, CEO Pieter Elbers said IndiGo has been extending some of its existing leases and postponing the return of aircraft.

“Another item that is being discussed today, and we are still in the final stages of clarification, is a possible wet lease operation,” Elbers said, adding that the market is recovering very quickly.

With increased competition and the revival of Air India under the ownership of Tatas, IndiGo is also looking to expand its international operations.

The national carrier said it was optimistic about a return to operating profitability in the current quarter after its loss in the July-September period widened due to high fuel costs and foreign exchange losses.

The airline expects an increase of about 25% in capacity measured by available seats per kilometer in the current quarter compared to the previous year. It also maintained guidance for a capacity increase of 13% to 17% for the current fiscal year.

“In the coming years, we will build on our solid (national) foundations with more international aspirations,” Elbers said.

He said the disruption of the supply chain in aircraft manufacturing and the subsequent shortage of spare engines worldwide affected the airline’s operations due to the grounding of the aircraft.

IndiGo reported a widening loss to Rs 1,583.34 crore for the September quarter due to higher fuel cost and foreign exchange loss.

CEO Elbers listed on-time performance (OTP), affordable fares, courteous and hassle-free service and unmatched network coverage among the priorities. It will also focus on developing internal structures, people and processes in line with the size of operations, customer base and future ambitions.

“We will build on our strong foundation with more international aspirations,” he said.

The airline, also seventh in the world in terms of daily departures, reported a loss of 381.8 million rupees, excluding the foreign exchange loss of 1,201.5 million rupees.

IndiGo currently operates more than 1,600 daily flights and has a domestic market share of over 57%.

In the September quarter last year, the airline posted a loss of Rs 1,435.66 crore.

However, the company’s total revenue rose to Rs 12,852.29 crore in the second quarter of the current fiscal from Rs 5,798.73 crore in the same period a year ago, it said in a statement.

In the last quarter of September, total expenses rose to Rs 14,435.57 crore. Fuel costs in the last quarter of September rose to Rs 6,257.9 crore from Rs 1,989.4 crore in the year-ago period.

IndiGo chief financial officer Gaurav M Negi said that while fuel and foreign exchange continue to represent headwinds, “we are reasonably confident that we will return to operating profitability in the third quarter.”

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(c) 2022 The Mint (New Delhi)

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