Budget carrier IndiGo, which turned profitable in the December quarter on the back of higher passenger volumes, on Friday said the demand for corporate travel is returning gradually. “We are saw a recovery of almost 70 per cent of the recovery in corporate travel in December. But due to the third wave of the pandemic, we started seeing a drop in this business and it came down to about 25 per cent of the pre-COVID level in the first half of January,” IndiGo Chief Strategy and Revenue Officer Sanjay Kumar said during a post-earnings analysts call.
“But again we are seeing recovery after the middle of January and we have seen some better numbers coming in. We hope that we will get back to a similar kind of growth very soon in the next few weeks, going forward,” he said.
IndiGo Whole Time Director and CEO Ronojoy Dutta said that while the airline is going to see a decline in revenue in the March quarter, a recovery is likely to take place in the first quarter of next financial year owing to the rebound in demand.
“We are expecting a 10-15 per cent lower capacity deployment in the March quarter over the December quarter. We also anticipate our load factor in the fourth quarter could possibly be weaker than the December quarter,” Dutta said.
He also noted that IndiGo added capacity in the December quarter to take advantage of the ongoing recovery which helped the airline turn profitable in the quarter.
Still there are a lot of headwinds in terms of using capacity. However, it also requires relaxations in restrictions in international operations, Dutta said, adding, “we need a fair amount of capacity to bring our unit cost down”.
Fuel continued to be a significant headwind, he said. “Our problem is that we are in a high fuel and tax environment”.
Dutta said that there will always be competition, which is in every industry and which is good for the industry but “to a large part, we focus on ourself and not so much on competition. Our strategy is to run a world class airline”.
IndiGo on Friday posted a profit after tax of Rs 129.8 crore in the three months ended December 2021.
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