IndiGo plans to launch flights to Nairobi, Jakarta and China

IndiGo will soon launch new flights between India and Nairobi in Kenya and Jakarta in Indonesia, Chief Executive Officer Pieter Elbers said on February 3, as India's biggest airline reported a profit of INR 1,422.6 crore in the December quarter.

Elbers said that IndiGo is looking to launch operations in China as well, as the country opens up to international travel following an easing of COVID-19 curbs.

Speaking in a post-earnings conference call, Elbers said IndiGo would look to add more than 15% to its capacity in 2023-24, after increasing its capacity by around 17% in 2022-23. "We expect deliveries of Airbus to resume in a strong manner in FY24, which will help IndiGo expand its capacity even more next year," Elbers said.

The airline said that it caters to 16% of the international market share to and from India, where it uses 23% of its capacity. "We will aim to deploy around 30% of our capacity for international traffic in 2023-24," Elbers said.

InterGlobe Aviation Ltd, the parent company of budget carrier IndiGo, posted an 11-fold jump in the quarter that ended December 31, 2022, led by a pick-up in demand for air travel.

ALSO READ - IndiGo reports a multi-fold surge in net profit to INR 1,422 crore in Q3

The airline's profit came in at INR 1,422.6 crore against a profit of INR 129.8 crore in the year-ago period. Revenue from operations surged 61% to INR 14,932 crore in the third quarter as against INR 9,294 crore a year ago.

IndiGo's management added that it expects profitability to continue in the coming quarters and will look to end 2022-23 as operationally profitable.

"Forward bookings have been strong in January and February and going forward, we expect to end 2022-23 being operationally profitable, excluding the impact of foreign exchange losses," the airline's top brass said.

IndiGo also said that its total cash as of December 31 stood at INR 219.247 billion, out of this around INR 100 billion was free cash which would be used to increase capacity in 2023-24.

The low-cost carrier also said that it has surpassed its pre-COVID numbers in terms of catering to passengers, however, the overall market is still operating below pre-COVID levels.

"The growth of the aviation market in India back to pre-COVID levels and further is an opportunity for IndiGo to grow," the airline's top brass said.

IndiGo said that its yield for the December quarter stood at INR 5.38 but have fallen around 3-4% in January due to seasonal weakness. Yield is the average amount of revenue received per paying passenger flown one mile. It is calculated as Passenger Revenues/Revenue Passenger Miles.

The airline's RASK (Revenue per Available Seat Kilometer) for the December quarter stood at INR 5.26. RASK is the total Operating Revenue per seat (empty or full) flown one kilometre. Often referred to as a “unit revenue” measurement it is calculated as Total Operating Revenues/Available Seat Miles.

IndiGo's average aircraft utilisation stood at around 13 hours per day, excluding the impact of grounded aircraft.

The airline also said that its ground aircraft are slowly returning to service but the situation will take some time to be completely resolved. IndiGo added that it has reached out to aircraft manufacturers for compensation for its grounded fleet.

"We have received some compensation for our grounded aircraft from OEMS (Original Equipment Makers/Aircraft Makers) which has led to a rise in our other income in the December quarter," the airline said.

IndiGo's other income jumped to INR 4,772 million in the December quarter when compared to INR 1,853 million for the same period last year.

(With Inputs from MoneyControl)

In order to cater to the increased air travel demand in Rajasthan, a new terminal building will be inaugurated soon in Jodhpur. Sharing the information on increased air travel infrastructure in the state, Minister of Civil Aviation, Jyotiraditya Scindia, said that the terminal will be built at a cost of INR 500 crore, with an area of 20,000 square meters. The airport will have the capacity to handle one thousand passengers and ‘give a big boost to tourism and the local economy’.

The minister added that since 2014, there have been significant developments in Rajasthan’s civil aviation landscape. He further added that new airports have been established in Kishangarh, Bikaner, and Jaisalmer and a new airport is also being planned for Kota.

Apart from infrastructure, tremendous growth has also been seen in the number of aircraft movements. “In 2014, this number stood at 555, which has now increased by almost three times to reach the mark of 1530 aircraft movements per week,” the minister stated. Scindia was speaking while inaugurating the IndiGo flight connecting Jaipur and Jodhpur which will be operated four days a week with effect from February 2, 2023.

Union Minister of Civil Aviation and Steel, Jyotiraditya M. Scindia along with Minister of State for Civil Aviation, General Dr Vijay Kumar Singh (Retd.) inaugurated a flight connecting Jaipur and Jodhpur virtually on Thursday, February 2. IndiGo will operate this route under a schedule effective from February 2, 2023.

Stating that it is a very important occasion for the two cities, he also emphasised how this new connectivity will further strengthen the already established Golden Triangle Tourist Circuit of Delhi-Agra-Jaipur.

The Minister went ahead to talk about India’s emergence as the 3rd biggest aviation market in the world in terms of domestic traffic and 7th biggest in the world in terms of international and domestic traffic combined.

Minister of State, General Vijay Kumar Singh congratulated the stakeholders and said that this connectivity will create ease of travel for tourists and play a big role in bolstering trade and tourism in the region.

The inauguration was also attended by Gajendra Singh Shekhawat, Minister of Jal Shakti, Government of India and Arjun Ram Meghwal, Minister of State for Parliamentary Affairs and Culture, Government of India. Rajiv Bansal, Secretary, Ministry of Civil Aviation, Asangba Chuba Ao, Joint Secretary, Ministry of Civil Aviation, R K Singh, Principal advisor – IndiGo, and other officials from MoCA, Government of Rajasthan and IndiGo were also present.

Aviation major IndiGo on Friday, February 3 reported multi-fold surge in net profit to INR 1,422 crore for the three months ended December. The profit rose over 1,000%, compared with INR 129 crore in the last-year period. Revenue from operations surged 61% to INR 14,932 crore in the third quarter as against INR 9294 crore a year ago.

The massive bottomline growth was driven by low base of last year, mainly due the impact of the pandemic. The company had posted a loss of INR 1,583 crore in previous September quarter.

The airlines sector was battered by the pandemic like any other, but it was among the last ones to recover from the after-effects of Covid. As economies opened and air travel demands recovered, companies' performances improved.

“Third quarter performance was strong both operationally and financially against the backdrop of robust demand for air travel. The wide range of initiatives that were set in motion across the organization have started to yield results. I am proud to report the highest-ever quarterly revenue of 154.1 billion rupees and robust profit of 14.2 billion rupees for the third quarter of fiscal year 2023.

We are thankful to our customers and all IndiGo employees who enabled us to achieve this performance. With a modern fleet of over 300 aircraft, we continue to serve the market with further capacity growth planned across domestic and international sectors."

Pieter Elbers, CEO, IndiGo

For the December quarter, IndiGo's passenger ticket revenues were INR 13,162 crore, an increase of 63% and ancillary revenues rose 25% to INR 1,422 crore compared to the same period last year.

The Gurugram-based company's EBITDAR (earnings before interest, tax, depreciation, amortisation and Rent) surged 70% to INR 3,399 crore for the December quarter. It was INR 1,995 crore in the same period last year.

Operationally, the airline's capacity increased by 25%, while passenger numbers rose 26% to 22.3 million. On the other hand, yield improved by 21.9% to INR 5.38 during the quarter under review and load factor advanced 5.4 points to 85.1% Fuel costs jumped 77% to INR 5,785 crore in the three months ended December.

IndiGo had a total cash balance of INR 21,924 crore, of which INR 10,612 crore is free cash and INR 11,312 crore is restricted cash.

In a reflection of strong travel demand, the budget carrier carried 2.23 crore passengers in the third quarter, an increase of nearly 26% compared with the same period a year ago when it stood at 1.78 crore.

The load factor, a measure of seat occupancy, rose to 85.1% against 79.7% in the year-ago period. The airline had a domestic market share of 55.7% in the December quarter.

The airline has a fleet of 302 aircraft, including 23 A320 CEOs, 160 A320 NEOs, 78 A321 NEOs, 39 ATRs and 2 A321 freighters as of December, a net increase of 22 passenger and 1 freighter aircraft in the third quarter.

The airline took delivery of 11 A320neos, 10 A321neos, four ATR 72-600s, and one A321 freighter in the previous quarter, while returning three A320ceos. The A320neos which were scheduled for return have been re-inducted to tide over the crunch due to delays in getting the grounded aircraft back in air.

It operated a peak of 1,685 daily flights during the quarter including non-scheduled flights. The airline’s network spanned across 75 domestic and 22 international destinations in Q3.

IndiGo reported capacity in terms of available seat kilometer (ASKs) growth at 28.8% in the third quarter and it expects fourth quarter ASKs to increase by around 45% year-on-year. On Friday, February 3 ahead of the results, IndiGo stock closed 1.17% lower at INR 2,100 apiece on the NSE.

Eight accidents involving planes of Flying Training Organisations (FTOs) happened in 2022 and an investigation related to one accident has been completed so far, according to the government.

At present, there are 35 Flying Training Organisations (FTOs) operating at 53 bases as approved by the Directorate General of Civil Aviation (DGCA).

ALSO READ - DGCA boosts monitoring of Flying Training Organisations to increase safety

8 accidents of trainer aircraft of FTOs happened in 2022

In a written reply in the Lok Sabha on Thursday, February 2, Minister of State for Civil Aviation V K Singh said there were a total of eight accidents in 2022 involving FTO aircraft. Probe into the accidents is carried out by the Aircraft Accident Investigation Bureau (AAIB).

As per data provided by the minister, the investigation into the accident at Jakkur Aerodrome in Bengaluru that happened on April 21, 2022, has been completed. A Cessna 185 plane was involved and the operator was Agni Aero Sports Adventure Academy (P) Ltd.

ALSO READ - DGCA reviews 30 flying training organisations; suspends certified flight instructors

Singh, in another written reply, said in June 2022, six FTO slots were awarded by the Airports Authority of India (AAI) at five airports -- Bhavnagar (Gujarat), Hubballi (Karnataka), Kadappa (Andhra Pradesh), Kishangarh (Rajasthan) and Salem (Tamil Nadu).

In 2021, AAI awarded nine FTO slots at five airports at Belagavi (Karnataka), Jalgaon (Maharashtra), Kalaburagi (Karnataka), Khajuraho (Madhya Pradesh) and Lilabari (Assam). These slots were awarded after a competitive bidding process.

ALSO READ - DGCA issues the highest number of Commercial Pilot Licenses in 2022 in the last decade

The minister also said there is no shortage of pilots in the country and as many as 1,165 Commercial Pilot Licenses (CPLs) were issued by the DGCA last year.

Indian aviation industry suffered a loss of over INR 24,000 crore in the last two financial years during 2020-22. As per the Union Ministry of Civil Aviation, the industry in FY 2020-21 suffered a loss of INR 12,479 crore and in FY 2021-22 it was INR 11,658 crore.

In a reply at the Lok Sabha on Thursday, February 2, the Ministry said the Centre has taken various initiatives to support the aviation industry.

The reduction in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) was taken up with state governments and union territories levying high VAT on ATF. As a result, VAT on ATF has been reduced by 17 states and UTs.

Indian aviation industry suffered a loss of INR 24,000 crore in 2020-22

The reply said that the Goods and Services Tax (GST) rate has been reduced from 18% to 5% for domestic Maintenance, Repair and Overhaul (MRO) services.

The Ministry further informed that the Airports Authority of India (AAI) and other airport developers have targeted a capital outlay of approximately INR 98,000 crore in the next five years for expansion and modification of new and existing terminals as well as the strengthening of runways, among other activities.

The Centre has also approved the Emergency Credit Line Guarantee Scheme (ECLGS) for the aviation sector, according to the Ministry.

Based on the industry demand, the scope of ECLGS has been enhanced to provide credit support to these companies up to 100% of their total credit outstanding (both fund based and non-fund-based outstanding) as on reference dates, subject to a cap of INR 1,500 crore per borrower, whichever is lower.

The goods and Services Tax (GST) rate has been reduced from 18% to 5% for domestic Maintenance, Repair and Overhaul (MRO) services.

Meanwhile, the allocation to the aviation sector in the Union Budget FY23-24, which was presented by Finance Minister Nirmala Sitharaman, more than halved to INR 3,113.36 crore. Of this, INR 3,026.70 crore is for revenue and INR 86.66 crore is for capital.

ALSO READ - Civil Aviation Ministry allocated INR 3,113.36 crore in Budget 2023-24; 50 airports, heliports to be revived

The Finance Minister also announced the setting up of 50 new airports, and water aerodromes and revive advanced landing gears to improve regional air connectivity. The government has also announced plans to develop 50 tourist destinations and sector-specific skilling and entrepreneurship development schemes such as the Swadesh Darshan Scheme. 

Rating agency ICRA says the allocation to the aviation sector in the budget is aimed at boosting domestic tourism and travel. "The Union Budget for FY2023-24 has reiterated its focus on improving regional air connectivity through setting up of 50 additional airports, heliports, water aerodromes and revival of advance landing grounds, which will boost domestic air travel," it says. 

An Air India Express flight from Abu Dhabi to Kerala's Kozhikode (or Calicut) was forced to return shortly after taking off because of a 'flameout' in the No. 1 engine while the plane was climbing.

National regulator Directorate General of Civil Aviation told news agency ANI the plane was a Boeing 737-800 and that it was 'involved in (an) airturnback'.

"Today (Feb 3) an Air India Express B737-800... operating flight IX 348 (Abu Dhabi-Calicut) was involved in (an) airturnback due to No 1 engine flameout at 1,000 ft during climb."

The airline told ANI the plane managed to land and that all on board are safe.

According to flight-tracking website Flightradar24, the flight took off at 9.59 pm UTC (3.29 am IST) and landed less than 45 minutes later.

The plane reached a max altitude of 1,975 feet.

Earlier this month another AI Express flight - from Trivandrum to Muscat - was forced to land, less than 45 minutes after taking off, due to a technical error.

Officials told ANI of a problem with the FMS, or flight management system.