Top Asia budget carrier sees 40% capacity drop this quarter

IndiGo expects passenger carrying capacity to slump 40% in the current quarter, showing that even India’s biggest airline can’t escape the coronavirus pandemic and a near shutdown in international air travel. IndiGo posted a loss of 11.95b rupees ($161m) for the three months ended Sept. 30. The deficit widened from 10.7b rupees in the year earlier period when it suffered foreign-exchange losses, a reassessment of future maintenance costs and muted passenger traffic growth. IndiGo is the world’s biggest customer for Airbus' A320neo jets. India has allowed local airlines to fly limited schedules since May after two months of a strict nationwide lockdown, gradually opening up the domestic market. IndiGo, which has a market share of close to 60%, still couldn’t fill a third of its seats in September, data from the country’s aviation regulator showed. Yield -- a measure of fares -- rose 8.9% to 3.83 rupees, the airline said Thursday. Yields will remain under pressure as a government cap on fares stays in force until late November, according to Bloomberg Intelligence. IndiGo may face persistent losses as it tries to recover, with maintenance costs for engines and older jets potentially eclipsing savings from lower plane usage, cheaper fuel and job cuts, BI analysts James Teo and Chris Muckensturm wrote Tuesday.<br/>