IndiGo's Ronojoy Dutta on the airline's performance and the horizon ahead

Q: You have been very bullish about the RASK getting higher and higher… that the Indian customers will be willing to pay more for a higher, a better and efficient service. Your RASK is now at historic high. How much more scope is there to improve this further? 

Ans:

>Loss reported by the airline was Omicron-driven 

>Rise in fuel prices also contributed to the airline’s loss

>But the market is optimist because of the revenue performance 

>In April 2022, the airline’s revenue was up 12% compared to pre-Covid

>Only 5-7% of Indian travel by air and the percentage is going to grow

>Companies now realising that it’s efficient to pay for employees/labours’ airfare to avoid lost business etc  

>Indians are traveling more than ever, within the country and abroad

>Good customer service and after-travel services are also helping in revenue growth  

>Airline’s revenue is strong, but fuel prices are a problem and the mark to market adjustment distorts its numbers 

Q: So, (you are indicating) higher competition and higher intensity in the market and multiple players vying for the same share of pie is not likely have any kind of impact.

Ans:

>Industry made a mistake in the past by assessing the revenue growth in terms of volume only 

>Airlines can’t lose on every passenger and aim to make it up in volume  

>Domestic airlines are now optimistic of a strong revenue up-cycle 

Q: You’re looking at 55 to 60% increase in ASKs in FY23. So where will we see… Would we see Indigo ramping up frequencies existing routes or will we see more new stations coming up?   

Ans:

>55% growth was estimated over 2022 which had the Covid Omicron-effect

>Compared to pre-Covid, IndiGo’s capacity would be above 15%, and 20% in a year’s time

>IndiGo will continue to look for new stations in domestic market 

>The airline is lagging behind in the revenue side on international market 

Q: Is there again some thought about getting wide body planes? 

Ans:

>Airline to go for wide body planes if gets Minimum Connecting Time (MCT) and banks aligned 

>Plans to make a foray into Europe as well as the East with XLRs