MUMBAI, Aug 11 — India’s largest airline IndiGo hopes to raise US$534 million (RM2.2 billion) by issuing shares to try and boost liquidity after the coronavirus pandemic sparked record losses and job cuts.
Airlines worldwide have reported steep falls in revenue because of a slump in demand as governments impose sweeping travel restrictions to battle Covid-19.
IndiGo last month reported its highest-ever loss of 28.49 billion rupees for the quarter ending June 30, and said it would cut 10 per cent of its staff.
The carrier’s parent firm Interglobe Aviation announced late yesterday that its board had approved the issue of shares to raise 40 billion rupees.
The pandemic has dealt a sharp blow to India’s aviation industry, which had seen tremendous growth in recent years.
Adding to the gloom, industry body IATA warned last month that global air traffic would not return to pre-pandemic levels until 2024, a year later than previously forecast.
Other Indian budget carriers GoAir and SpiceJet are also struggling to manage their finances and are renegotiating contracts with aircraft owners.
The IndiGo share issue decision follows its announcement in June to slash expenditure by 40 billion rupees and cut costs by quickly returning older planes to leasing firms.
Shares in Interglobe Aviation were down over one per cent in Mumbai today following the equity announcement. — AFP
