After Q2 turbulence, ixigo eyes smoother skies ahead as Diwali, New Year drive bookings

Flight

After facing market-led headwinds in the September quarter, travel-technology firm ixigo is seeing signs of recovery. The company expects Diwali demand, coupled with strong year-end and New Year travel demand, to drive a rebound in bookings.

"We are seeing some green shoots in October with a peak day recently crossing 500,000 passengers and as per the winter schedule filed with Directorate General of Civil Aviation (DGCA). Departures across airlines will be up nearly 6% to 26,495 per week over the winter schedule of 2024 when there were 25,007 weekly departures," Aloke Bajpai, Group CEO, ixigo, said during the company's September quarter earnings conference call.

He added that they don't see the kind of supply constraints they were seeing in the beginning of the previous (Q2) quarter. "There are green shoots in October in terms of supply coming back on the air side. We've seen the winter schedule that was filed in the Directorate General of Civil Aviation (DGCA) which indicates that there will be more gains up in the air."

While ixigo reported a loss of Rs 3.5 crore in the September quarter of FY26, its flight revenue grew 60% YoY in Q2 to Rs 89.4 crore.

For flights, the overall domestic market contracted by about 2% year over year in Q2 due to capacity constraints.

"Our growth headroom lies in our scale, as we are still relatively small as compared to our potential, and in our strong brand presence in Next Billion User (NBU) markets. Over 50% of new flight bookers that are coming from our NBU app users are first-time flyers, allowing us to keep adding new travellers to the market," Bajpai said.

The company is seeing its international flights business growing faster than domestic.

The other two segments--- buses and trains also faced some market headwinds. "Monsoon did affect the trains and buses side of the business," Bajpai said.

The train segment reported slower growth in Q2 with revenues up around 11% to Rs 122.8 crore from Rs 110.43 crore during the same period a year ago.

Bajpai pointed to the series of changes introduced by Indian Railways which impacted the train business. These changes included some reductions in waitlisted inventory, Aadhaar-based authentication for Tatkal bookings and the restricted time window for agents moving to 30 minutes for Tatkal bookings. However, for the advance reservation period (ARP) bookings, Aadhaar-verified users on Online Travel aggregators (OTAs) have been allowed to book just 10 minutes after opening time for ARP bookings, i.e. 8:10 AM onwards. These changes temporarily altered booking patterns across the ecosystem and it took a couple of weeks for the users to adjust to these changes, making year-over-year comparisons less representative of the underlying momentum in our train segment, Bajpai noted.

He pointed to some stability by the end of the September quarter.

"By the end of the quarter, we saw some normalisation and stabilisation from the dip we saw at the beginning of the quarter due to these changes. In fact, we touched a new all-time high of 350,000 train passenger segments around the time the advance bookings for Diwali opened," he said.

He added that because of the change from four months to two months for the train advance booking, they have started to see bookings for Christmas, New Year break. "I think that's shaping up quite well. The macro environment looks better in this (December) quarter."