Expect overall traffic to reach pre-Covid level by Q2 of 2022: IndiGo CEO

IndiGo is hoping to reach pre-Covid level of overall traffic, both domestic and international, by the second quarter of next year, its CEO Ronojoy Dutta said on Wednesday.

The carrier is currently operating around 40 per cent and 30 per cent 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 per cent of its workforce due to the coronavirus-induced economic crisis. Before the pandemic hit, IndiGo used to operate around 1,500 daily flights.

IndiGo was operating 80 per cent 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 regarding air travel, which was observed among people during the first Covid-19 wave, 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 years.

"About 45 per cent 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 per cent 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 years, cities such as Patna, Ranchi, Coimbatore have seen faster growth than 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 (daily) 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 per cent 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 G-7 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 per cent of their pre-Covid domestic flights instead of 80 per cent allowed before.

"We believe that we need to remove this cap or take it up to 80 per cent," Dutta stated.

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

"By year-end, we expect to be above 80-85 per cent 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.

IndiGo and its ground handling subsidiary Agile has lost 17 and five employees, respectively, till date due to COVID-19, he said.

He said the government should also remove the upper and lower limits placed on domestic airfares.

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 layoffs."

IndiGo on May 31 had said senior employees would 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 COVID-19.

India had suspended scheduled domestic flights for two months last year -- from March 25, 2020 to May 24, 2020 -- due to the coronavirus-induced lockdown.

When it resumed domestic services, it did with lower and upper limits on airfares and a cap on the number of flights an airline can operate.

The lower limits on airfares and the cap on number of flights is to help airlines with weak finances. The upper limit on airfares is to help passengers.

Scheduled international passenger traffic continues to remain suspended in India since March 23, 2020. However, special international flights have been operating since July 2020 under air bubble arrangements formed with various countries.