With the acquisition of Air India by Tatas, we will have responsible competition: CEO of IndiGo

At the end of November, our capacity is back. It is higher than before Covid. So at the national level, we are doing well in terms of load factors reaching 86 percent on some days for the whole month, and around 79-80 percent on others. International is a problem because it is a higher-margin business that accounted for 25% of our capacity, and international is only slowly coming back. So at this point we are at a third of the pre-Covid levels. But there is a line of sight as to when we will return to pre-Covid levels and some markets have opened up well. Doha, Dubai, etc. But in other markets like Saudi Arabia, Thailand, and Singapore, it’s not great. Hopefully things open up in December, so that’s the key to getting back to profitability. International markets must open up.

Oil prices are really a challenge and a huge pressure on the cost side. There are two ways to be profitable now – It depends a lot on the international scenario where the most optimistic is that the oil stays stable or goes down a bit and the international opens up and then we can think of profit. However, if he climbs higher, we will suffer deeply.

When it comes to airfares, India has the lowest airfares in the world and this is not a one-off phenomenon. However, we have seen some stabilization over the past 3-4 months. But it has to stay there for each of us to be profitable, and it has been a solid season. I hope it’s not just a seasonal effect. We price plane tickets according to demand. My cost is going up so much so my price is going up too, it kind of follows our costs, but we don’t pass it on … we try to keep it at a reasonable level in order to absorb all of our costs including fuel.

I will distinguish between economically responsible competition and economically irresponsible competition. So there is irresponsible competition when people are funded by the taxpayer. Irresponsible competition occurs when people are just fighting for survival and cash flow, and not looking for profits.

Fortunately, with the acquisition of Air India by the Tata group, all this is reversed. Now we will have economically responsible competition. Besides the pricing issue, it is also good to have a strong ecosystem if we have two strong Indian airlines. I think we will have a bigger and stronger ecosystem in India which I think would be great for everyone.

Market share is a consequence of what we do and it’s not our goal at all. In other markets, too, small airlines have a good margin. Just because we have a higher market share doesn’t mean we don’t have profitability. We seek to serve the customer and are focused on our mission as an economic catalyst and national integration. So we added the Dimapur flight to Delhi, we have received many letters of compliments from customers and this flight is doing exceptionally well and is also very profitable. As a result, the market share increases, but this is not the goal.

Infrastructure is really the problem. In the metro as in small towns. The terminals are not connected, there are not enough parking spaces, etc. The point is that, public or private airports, we need a lot of attention at all airports to improve our infrastructure, and that affects our growth plans.

We want to be present at all airports. We want to connect all corners of India. We are very focused on the geopolitical aspects of being India’s largest airline.

No, we are not players in the merger or consolidation game. I would also say that we do not dominate any market, we participate in it. There is a lot of competition.

At the moment, we are comfortable. We don’t want to change our frequency and we don’t intend to. Because it really is a long-term planning process. We have a good plan and order book. While we are taking deliveries, we are also removing planes, but at the moment everything is fine. We still have to recover from the bumps in the record.

We’re not going to stray from the rental model. We bought it when it was viable, we also did sale-leaseback. At this point, the toll has taken a big hit, and we’re trying to get over it. But since we have a strong cash position, we would consider purchasing a few planes.

We took approvals just in case we needed to raise funds. We never needed cash, so we didn’t really want to dilute our shareholders unnecessarily, but we kept it as catastrophe insurance. As the income situation is improving rapidly, we do not see the need for it now.

We have contracted debts with Indian banks. We hope our cash flow improves so that we can start paying off, but we’re comfortable for now.

I would say the worst is far behind us. They both have a mutual agreement on the welfare of the airline now. There were all these issues about SEBI, related party transactions. It was all put to bed. So I think you know this story is history.