The October-December period is usually the best for Indian airlines as the festive followed by the wedding season and year-end travels drive up demand for air transport.
“We have delivered exceptional third quarter results and there were several driving forces that have led to this- a substantial growth in demand for air travel, continuation of strategic expansion across markets and an enhanced operational performance fueled by the festive period,” IndiGo CEO Pieter Elbers said.
Elbers said that he expects the demand to continue despite a slowdown in other consumer sectors. The airline will increase its capacity by 20% in the ongoing quarter.
The airline, he said, had 90 % seats full for the last two months and carried a record 10 million customers in November.
“We serve first time flyers, quite a lot of them, but we also serve the corporate markets. So in all these segments actually we see a very healthy demand,” he said.IndiGo’s revenue in the quarter grew 13.7% to Rs 22,110.70 crore as compared to last year. Yields, a metric for profitability, fell 1% year-over-year to Rs 5.43 rupees per kilometre as unit cost increased by 10 % as the airline has been facing expense on grounded planes due to faulty Pratt & Whitney engines which till last quarter had led to over 70 planes being parked.IndiGo also had to compensate the fall in capacity with short term leasing of planes which are costlier.
To soften the impact of currency fluctuation, the airline has decided to hedge its foreign currency outflow, Chief Financial Officer Gaurav Negi said adding that more expansion on international routes also acts as a natural hedge against such fluctuation.
“We expect the natural hedges to also improve on the cost side, as the global fuel prices went down by more than 20% on a year over year basis and fuel costs also reduced by 16%,” Negi said.
He also said that the airline has successfully tackled the grounding situations which will reduce to around 40 by April.
