InvestorQ : How are airlines like Indigo planning to seek alternative sources of revenue in the midst of this slowdown?
sara Kunju made post

How are airlines like Indigo planning to seek alternative sources of revenue in the midst of this slowdown?

Answer
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4 months ago


With the core flying business tepid and likely to take time to pick up, Interglobe the owner of Indigo Airlines is looking to raise up to Rs.5000 crore by leasing assets including aircraft and engines. This was confirmed by the CEO of the airline. The biggest opportunity for Indigo likes in its high quality fleet and to save costs they plan to focus on the efficiency of aircraft in use and lowering maintenance costs. Indigo is also looking to renegotiate contracts with suppliers, vendors lessors etc to reduce costs further. Indigo has already initiated cutting employee expenses by 25% and in the process it has implemented salary cuts as well as a leave-without-pay programme. Indigo believes that it may at best manage to scale up its capacity utilization to 50% but that would still leave a lot of room for cost cutting. Indigo is also betting heavily on the cargo segment and has recently converted 10 passenger aircraft into freighters.