Our operations have been severely impacted due to COVID-19, says IndiGo CEO

InterGlobe Aviation (IndiGo), which reported a loss of Rs 870 crore in the fourth quarter ended March, said its revenue was 'materially' impacted by the novel coronavirus led nationwide lockdown.

Our operations have been severely impacted due to the COVID-19 pandemic. The government declared a national lockdown with effect from March 24. As a result, no scheduled passenger flights were operated between March 24 and May 24.

Our revenue was materially impacted by the shutdown of air traffic during this period. During the same period, we continued to incur committed expenditure with respect to our employees, aircraft-related costs expenditures such as lease rentals and other expenditures. This has significantly impacted our profitability.

We have taken several actions to mitigate the effect of COVID-19 on our business. We have taken steps to reduce our unit costs and increase our liquidity by making our fleet more efficient , ensuring our capacity is right sized to the market, putting on hold discretionary expenses, deferring certain capital expenditures, etc. We have commenced our operations with effect from May 25.

We will ramp-up our operations in a phased manner, subject to government directions. We have a sufficient fleet, crew and other operating staff available to scale-up operations across networks to cater to demand as it scales-up, strictly adhering to safety and social distancing norms. We have introduced a number of measures as part of our new standard operating procedures like spray cleaning the aircraft at every arrival, increased frequency of deep cleaning of the aircraft, wiping of all touch points such as tray tables, arm rests, seat belts, lavatory door, etc to ensure the health and safety of our passengers.

Due care has been exercised to determine recoverability of the carrying amount of the assets while preparing the company’s financial results as of and for the year-ended March 31. We have performed sensitivity analysis on the assumptions used and based on current estimates, expects the carrying amount of these assets to be recovered. We have a strong cash position as of March 31 and hold our current investments in highly liquid funds and bank fixed deposits. We have met and expect to meet all our ongoing cash obligations pertaining to our lease rentals, debt repayments and any other financial obligations.

The unprecedented nature of the pandemic makes the future business environment uncertain. However, we will continue to carry out the impact assessment on our assets and closely monitor any material changes to future economic conditions.