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IndiGo plans to cut costs by phasing out 120 A320 ceos in 2 years

Author : Pankaj Singh | Published Date : 2020-06-04 

The company have revealed plans to swap out old fleets of A320 ceos with newer, more fuel-efficient A320neo models

Indigo, an Indian airline renowned for its low-cost tickets, has recently revealed plans to phase out nearly 120 of its A320ceo airplanes within the next two years. These aircraft have high maintenance costs, which have become a burden for the airline as it recovers from the losses incurred during the COVID-19 pandemic. 

Reportedly, IndiGo’s CEO Ronojoy Dutta has a clear long-term strategy for the airline, which is centered around moving to a more efficient and newer fleets. The company is open to experimenting with new revenue models and networks to strengthen its business in a post coronavirus era.

According to reliable sources, the Indian airline is in talks with its partners for restructuring better terms and prices. As of March, Indigo has incurred a net loss of Rs 871 crore in total which is likely to get worse in the next quarter results as the airline struggles to start its operation during the lockdown. 

Speaking on the move, Dutta explained that the company would be cutting costs even further, making its fleet efficient and ensuring its capacity is accurately sized to as per demand. IndiGo sees an opportunity to make its fleet more efficient by shedding old classic [A320] ceos, which have high maintenance costs, a problem that has been lingering for months. 

The airline is working on returning these fleets as immediately as possible and in doing this, it would also mitigate the issue of lowering maintenance costs. Subsequently, the airline would be accepting deliveries of the latest [A320] neos that would help the firm on fuel cost efficiency, said Dutta.

In this challenging environment, the main focus of the business should shift from gaining growth and profitability to managing liquidity and cash, he added.

Source Credit: https://economictimes.indiatimes.com/industry/transportation/airlines-/-aviation/indigo-to-experiment-with-new-revenue-model-eyes-additional-liquidity-worth-up-to-rs-4000-cr/articleshow/76159130.cms

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Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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