IndiGo builds $1 billion war chest for third COVID-19 wave

Domestic airline IndiGo is building a $1 billion war chest as it prepares to tide over a third wave of COVID-19. The airline's plans come amid receding daily cases in the country after a disastrous second wave. Even so, chief executive Ronojoy Dutta believes that the airline's business would return to pre-pandemic levels by the end of the year.

The budget airline plans to raise $410 million through a qualified institutional placement (QIP) to prepare for the worst-case scenario, stated a report in Financial Times. It also plans to raise $600 million from bank credits, sales and leasebacks of aircraft.

Dutta told the daily that there is no 'ifs and buts' about the third wave. He stated that doctors have been warning about the next wave, and it is likely to come around November-December.

"The board says 'look, the environment is volatile...what if we go for another three months' shutdown, then what?' And the revenue is zero? It's for that sort of disaster scenario that we are building insurance," said Dutta to the daily.

While being cautious of the third wave, Dutta also believes that it is not likely to be as damaging as the second one. He says that as long as India keeps vaccinating about 7 lakh people a day, the third one will be a very flat wave.

The IndiGo chief is also looking forward to 'revenge vacations' that Indians are anticipated to take after being cooped up at home for months. Dutta expects it to benefit the airline. IndiGo has, in fact, added new destinations at holiday hotspots such as Maldives.

Dutta told the daily that the pandemic has set India back at least two-three years. "But we'll catch up...I have great faith in the Indian growth story," he added.

Also read: COVID-19 impact: IndiGo announces compulsory leave without pay policy for senior employees

Also read: IndiGo hopes to attain pre-COVID-19 traffic by Q2 of 2022: CEO