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Looks like we are finally emerging out of COVID crisis: IndiGo CEO Ronojoy Dutta

While addressing analysts and shareholders on the earnings conference call of InterGlobe Aviation Dutta said that it is now time for the Indian aviation industry to repair and heal from the damage caused by the pandemic.

October 28, 2021 / 07:35 PM IST
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Ronojoy Dutta, chief executive officer of InterGlobe Aviation, which operates India’s largest airline IndiGo on October 28 said that India seems to be finally emerging out of the COVID-19 pandemic.

While addressing analysts and shareholders on the earnings conference call of InterGlobe Aviation Dutta said that it is now time for the Indian aviation industry to repair and heal from the damage caused by the pandemic.

He added that at IndiGo, the airline plans to keep its cost structures in check and grow rapidly both in the domestic and international markets.

"We continue to work towards a return to profitability to strengthen our balance sheet. With a modern fleet, dedicated employees, and a stronger economic environment we are well-positioned to leverage all the growth opportunities around us," Dutta said.

InterGlobe Aviation, the operator of IndiGo, India's largest airline in terms of market share, today reported a net loss of Rs 1,435.7 crore for July-Sept quarter, showing a steady decline in loss as compared to Rs 3,179 crore in Q1 FY22.

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IndiGo's EBITDAR (earnings before interest, taxes, depreciation, amortisation, and restructuring) for Q2 FY22 stood at Rs 340.8 crore, with the margin of 6.1 percent vs Rs 408.5 crore and 14.9 percent during the same period last year.

For the quarter, IndiGo's passenger ticket revenues stood at Rs 4,716.3 crore, recording an increase of 113.6 percent. The ancillary revenues were Rs 817.7 crore, an increase of 61.4 percent compared to the same period last year. The company's total expenses for the September quarter also rose 71.3 percent YoY to Rs 7,234.4 crore.

IndiGo's average daily revenue booked in October was equal to that of January 2020, just before the outbreak of the COVID-19 pandemic, while the airline was operating with a passenger load factor of above 70 percent in October, Dutta said.

He added that rising input costs, especially of crude oil continue to remain a cause for concern for airlines in India and that the Ministry of Civil Aviation needs to work with state government to reduce tax on Aviation Turbine Fuel (ATF)."All airlines have shown the ministry how out of line the indirect taxes are in India. We are a heavily taxed industry. We are hopeful that bigger states will also reduce VAT on ATF," Dutta said.

Furthermore, he said that IndiGo has requested the MoCA to remove fare caps completely and let airlines compete in an open market.

IndiGo's Chief Strategy &Revenue Officer Sanjay Kumar said that lot of corporates are travelling for conferences, corporate travel is coming back.

He added that IndiGo has seen a 50% recovery in corporate travel and said that he hopes corporate travel gains momentum post-Diwali.

When asked about the launch of upcoming ultra-low-cost carrier Akasa Air backed by investor Rakesh Jhunjhunwala, Dutta said that while companies can plan to operate at very low costs but in reality, it's difficult to have a lower cost structure than IndiGo.

He said that IndiGo operates at maximum seat density in its flights and that it already has unbundled to the extent regulation in India permit, thereby making IndiGo's cost structure very low.

On the sale of Air India to the Tata Group, Dutta said that he expects Air India to operate like a full service carrier and is likely to focus on international markets for its revenues.



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first published: Oct 28, 2021 07:35 pm
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