Ahead of Akasa Air launch, IndiGo is unfazed as it ‘minds its own business’
IndiGo is currently in a strong position and there is scope for immense growth as only 7 percent of Indians fly at present, said CEO Ronojoy Dutta.
India’s largest airline IndiGo is unfazed at the entrance of upcoming competitor Akasa Air. The airline does not plan to follow its competition but intends to build on its own strength as the low-cost carrier space heats up.
“IndiGo minds its own business. We don’t do anything because of the competition. We look at our business model which is very strong. We look at our opportunities which are very big. We look at our abilities which are very deep and we say let’s do it. So that’s what we are doing. Other people will do their own thing, it is fine but we mind our own business and maximize our opportunities,” CEO Ronojoy Dutta told CNBC-TV18 on the airline’s 16th anniversary.
Dutta further stated that IndiGo is currently in a strong position and there is scope for immense growth as only 7 percent of Indians fly currently.
“India is growing rapidly, travel revenues go twice the rate of GDP…Now people are moving everywhere not just for jobs but for leisure too…Future looks strong,” Dutta added.
The airline, which flies to 74 domestic and 25 international destinations, aims to expand its international network by offering non-stop offerings in all major cities within 7-8 hour air distance from Mumbai, Delhi, Chennai, and Kolkata.
For now, the airline sees huge upside in the revenue environment, demand for air travel, its penetration in the market, and the overall network. However, high level of dollar and steep prices of aviation turbine fuel continue to be challenges for growth.
The airline reported its April-June earnings for FY23 on August 3. It posted a second straight quarter of net loss at Rs 1,064 crore. The airline had posted net loss of Rs 3,174 crore in the same quarter in the last financial year. On the revenue side, IndiGo saw its strongest revenue performance in a quarter at Rs 13,019 crore. The Yield for the quarter also improved by 50.3 percent on year to 5.24 rupees per km. Going forward, the management expects the Q2 revenue performance to decline sequentially due to seasonal weakness and high costs.
Mr Dutta said that the airline industry has been making presentations for bringing ATF under the GST regime in order to bring down costs.
“We have a strong ally in the ministry of civil aviation…the aviation ministry is trying to get ATF under GST.. but we are facing roadblocks at the finance ministry. We keep making presentations, keep trying to be persuasive. We haven’t hit success yet in getting ATF under GST, hopefully will be there soon,” Dutta said.
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