IndiGo reports net loss of INR 1,064 crore in Q1

IndiGo narrowed its quarterly net loss on year as air travel demand increased and offset soaring costs of fuel. India's biggest airline by market share posted a net loss of INR 1,064 crore in the April-June quarter compared to a loss of INR 3,174 crore a year earlier.

Its outgoing CEO Rono Dutta said the airline will continue to be in the red in July-September. But he expects it to return to profit in October-December.

IndiGo posted total revenue of INR 12,855 crore, a 375% increase on year. Its number of passengers rose 222%. But fuel costs for the quarter doubled to INR 5,990 crore.

IndiGo posted a net loss of INR 1,064 crore in the April-June quarter compared to a loss of INR 3,174 crore a year earlier.

IndiGo’s total income this Q1 was INR 13,018.8 crore, up 311% from INR 3,170.3 crore in the same quarter last year. However, total expenses also rose 122% from INR 6,344.4 crore in April-June 2021 to INR 14,083.1 crore this Q1.

IndiGo had a total cash balance of INR 19,069.4 crore comprising INR 8,303.7 crore of free cash and INR 10,765.7 million of restricted cash. The capitalised operating lease liability was INR 34,474 crore and the total debt (including capitalised operating lease liability) was INR 39,277.6 crore.

"Our revenue performance this quarter was impressive. We reported the highest ever revenue generated by the company and thereby produced profits at an operational level. However, cost pressures on fuel and foreign exchange prevented us from translating this strong revenue performance into net profitability. While our financial performance in the second quarter will be challenged by weak seasonality, the long-term revenue trend remains strong." Ronojoy Dutta, CEO, IndiGo

Capacity increased 145% YoY while passenger numbers climbed 221.9% for the quarter. Fuel prices rose 95.5% YoY. InterGlobe reported an EBITDAR of INR 716.90 crore with an EBITDAR margin of 5.6%. This is against a negative EBITDAR of INR 1360.20 crore with a negative EBITDAR margin of 45.2%.

India's domestic travel demand spurted in the April-June quarter shaking off the woes of the pandemic. A fresh spike in infections has, however, crimped demand to an extent.

ALSO READ - IndiGo reports loss of INR 1,682 crore due to a surge in aircraft fuel expenses in Q4

IndiGo’s total income this Q1 was INR 13,018.8 crore, up 311% from INR 3,170.3 crore in the same quarter last year.

In a post-earnings conference call with analysts, he said the lean travel demand in September would "drag down" the July-September quarter, but he expected a "perfect storm" of profitability in the third quarter. This would happen with passenger load factors inching up and yields rising. IndiGo will restore all salaries to pre-Covid levels by November.

ALSO READ - 55% of IndiGo domestic flights delayed due to crew calling in sick; DGCA seeks explanation

The airline's staff, including pilots, recently stayed away from work, protesting salaries. This led to considerable disruption in its flight schedules for at least one day. The airline industry in India is undergoing a churn.

The results come as IndiGo has seen a churn at the top, while reports of an exodus of its ground crew and technicians to other airlines have also been doing the rounds.

As of June 30, 2022, the airline had 281 aircraft in its fleet including 35 A320 CEOs, 146 A320 NEOs, 65 A321 NEOs and 35 ATRs

IndiGo expects a jump of about 70%-80% in capacity in available seats per kilometre in the current quarter from the same period a year earlier. Although demand has picked up, high fuel costs and inflation have emerged as big concerns for airlines.

As of June 30, 2022, the airline had 281 aircraft in its fleet including 35 A320 CEOs, 146 A320 NEOs, 65 A321 NEOs and 35 ATRs; a net increase of 6 aircraft during the quarter. It operated a peak of 1,667 daily flights during the quarter including non-scheduled flights.

During the quarter, the airline provided scheduled services to 73 domestic destinations and 20 international destinations with a technical dispatch reliability of 99.9% and an on-time performance of 85.5% at four key metros.

During the quarter, the airline provided scheduled services to 73 domestic destinations and 20 international destinations

Cash strapped carrier SpiceJet has faced the Indian regulator's mandated cap on its flights after a spate of safety incidents. It also received deregistration notices on its leased aircraft from lessors on alleged defaults. New airline Akasa has started selling tickets and will start flying soon.

Jet Airways under new owners is waiting to start, while the Tata group wants to build a big aviation entity with Air India, Vistara and AirAsia India. Dutta said he doesn't expect big disruptions in ticket pricing.

He said the airline has resumed operations to all international destinations barring China, Hong Kong and Myanmar. It plans to launch flights to Ras-al-Khaimah soon.

IndiGo CEO on the Indian airline industry

IndiGo’s outgoing CEO Ronojoy Dutta spoke about three major developments in the Indian airline industry at the moment — Tata’s mega plans for its four carriers, the shrinking of SpiceJet and Akasa taking to the skies.

“The competition is increasing, adding flights. But it’s quite small at this moment (Akasa). One of our major competitors has clearly reduced capacity a lot (SpiceJet) over the last year or two and that is helping us a lot. We do not see too much impact of the competition and if anything we see a healthy industry environment,” Dutta said in an earnings call on Wednesday. Ronojoy Dutta, CEO, IndiGo

Asked if full-service Air India revived by Tatas and Vistara will take back the corporate business class passengers IndiGo got after Jet’s collapse in 2019, Dutta said -

“We are not head-to-head competitors. They (AI and Vistara) are very focussed on long haul international, not short haul, with a business class product. That’s not a market we serve. Therefore their domestic strategy is tied to that (aiming to) fill their wide bodies. We are not in the same ballpark. We are in the domestic market, small town and frankly (our) metro-to-metro is one of our weaker segments as that has too much capacity. Corporate demand is back but metro-to-metro is relatively weaker than metro to non-metro and non-metro to non-metro. We really are separated by customer, destination and network segments. They will do great catering to international network and competing with Lufthansa, Qatar Airways. We are not."Ronojoy Dutta, CEO, IndiGo

When IndiGo goes medium-haul international once the Airbus A321 XLRS start coming in from mid-2024, it will be going to places like Tel Aviv, Milan and the far east. IndiGo international operations are also back to the pre-Covid level.

Tata Technologies will work on modernising operations of Air India by digitizing its fleet and equipment data and introducing digital solutions for aircraft maintenance, as the Tata Group moves to revive the country’s oldest airline.

Tata Technologies Limited is a company in the Tata Group that provides services in engineering and design, product lifecycle management, manufacturing, product development, and IT service management to automotive and aerospace original equipment manufacturers and their suppliers. It is a subsidiary of Tata Motors.

Air India's load factor improves to 80% under the Tata group.

Tata Technologies is 74% owned by Tata Motors. It gets 75% of its revenue from the automotive segment.

Chairman, N Chandrasekaran said earlier, that the Tata group will invest in new aircraft and technologies to make Air India a world-class airline, besides undertaking an organisational redesign to make it future-ready like its other group companies.

ALSO READ - Air India prepares to add more than 200 aircraft; the most significant order in a long time

Air India plans to order more than 300 planes, even as it sells old aircraft. It recently invited bids for its three long-range, wide-bodied Boeing 777 planes.

ALSO READ - Air India issues tender to sell 3 B777-200LR aircraft

The company also wants to make the aerospace business its second biggest revenue earner after automobiles. 

Aloke Palsikar, executive vice-president, Tata Technologies said the work would include digitizing the fleet and equipment data of Air India and also bringing digital solutions to aircraft maintenance, repair and the overhauled unit that the Tatas acquired along with the airline.

"Air India is not just a business for the Tatas. There’s a lot of emotion involved.The entire strength of the Tata Group will be leveraged in putting Air India back on its feet. We are no different. The whole integration has started. We are in conversation with them on a lot of our domains.” Aloke Palsikar, Executive Vice-President and Head of Growth Industries and Nordics, Tata Technologies

Palsikar said the company aims to make the aerospace business its second-biggest revenue generator in three years. The addressable market for Tata Technologies is worth $50 billion and will grow by 50% in a year.

Cruise is that phase of aircraft flight that starts when the aircraft levels off after a climb until it begins to descend for landing. Commercial or passenger aircraft are usually designed for optimum performance around their cruise speed and a number of factors including payload, centre of gravity, air temperature and humidity influence cruise speed and altitude.

It is a common observation among flyers traveling eastbound that the journey takes a significantly lesser amount of time than for the same journey westbound.

Representative | Source

Does it have anything to do with the earth's spinning? Not really.

Jet streams are narrow bands of strong wind in the upper levels of the atmosphere. The winds blow from west to east in jet streams but the flow often shifts to the north and south.

How do they affect flights?

These currents are formed as a result of atmospheric heating from the sun's radiation and the earth's Coriolis force. Together, these factors produce streams of fast flowing air that are responsible for flight times looking significantly different east to west. Airplanes flying eastward in a jet stream get a powerful boost while those flying westward must fight an equally powerful headwind.

The polar stream and the subtropical stream are the two most prominent jet-streams. The polar stream is the stronger of the two, and it causes much faster winds compared to the subtropical. This feature is exploited by most airlines that have their paths over the Atlantic or the Pacific.

National Weather Stream

Now that being said, how are the cruising altitudes determined?

According to Mark Vanhoenacker, a British Airways pilot and author of Skyfaring, an airplane’s altitude is a “vertical wayfinding in the ocean of air.”

Apparently, there happens to be a mnemonic, which is quite popular among pilots, that helps remember what altitudes to fly at under visual and instrument flight rules and it goes something like this:

The East Is Odd, West is Even OdderSource

What does that mean?

To get a perspective, here's something else you should know:

East and West are defined by the magnetic headings of zero to 179 degrees (East) and 180-359 degrees (West)Odd and Even refer to the altitudes

Representative | mediawiki.ivao.aero

For instance, a commercial flight flying under IFR at 33,000 feet will cruise eastbound at “odd” flight levels while a westbound flight will cruise at even numbered flight levels-for instance 32,000 feet (FL320) or 34,000 feet (FL340). This automatically results in the aircraft being separated vertically.

This is also where RVSM ( reduced vertical separation minima) comes into play. Modern regulations allow aircraft to be separated by as little as 1,000 feet above or below each other- thereby allowing for a more efficient use of airspace (between FL290 and FL410).

Quora

Furthermore, flying at higher altitudes also means planes can avoid birds, drones, and light aircraft and helicopters, which often fly at lower altitudes.

Representative | Boldmethod

In 2020, a British Airways Boeing 747-436 reached speeds of 825 mph (1,327 km/h) as it rode a jet stream accelerated by Storm Ciara. The aircraft flew from JFK to LHR in a record 4 hours and 55 minutes, thus beating the previous record of 5 hours and 13 minutes by the Norwegian.

Representative | InxeloTechnologies

Following factors also contribute in determining the cruising altitudes of aircraft:

Turbulence: Although a common event, it occurs less frequently at higher altitudesWeather: Troposphere is the part of the atmosphere where most of the weather event takes place and hence planes generally fly above this levelEmergencies: In the unlikely event of an emergency, flying at higher altitudes gives the flight crew ample time to fix the situation or find a safe place to land as opposed to flying low in a lighter aircraftA plane's altitude is majorly determined by its current weight and the atmospheric conditions at the time of flight- a no-brainer

Ultimately, its up-to the dedicated team of flight dispatchers and the ATC who are in charge of planning safe and efficient routes and altitudes for flying.

Representative | BAA Training

There are also laws in place that prohibit flying below 1,000 feet over a built-up area or 500 feet over any person, vehicle or structure.

SOURCE(s)

COVER: USA Today

Airbus has revoked its entire outstanding order from Qatar Airways for A350 jets, severing all-new jetliner business with the Gulf carrier in a dramatic new twist to a dispute clouding World Cup preparations, two industry sources said. No comment was immediately available from Airbus or Qatar Airways.

The two aviation titans have been waging a rare public battle for months over the scarred condition of more than 20 long-haul jets that the airline says could pose a risk to passengers and which Airbus insists are entirely safe.

ALSO READ - Qatar Airways takes Airbus to London High Court over A350 skin damage

Airbus scraps outstanding Qatar Airways A350 order amid paint dispute

Qatar Airways, which was the first airline to introduce the intercontinental jet to the skies in 2015, is suing Airbus for at least USD 1.4 billion after almost half its A350 fleet was grounded by Qatar's regulator over premature surface damage.

It has refused to take delivery of more A350s until it receives a deeper explanation of damaged or missing patches of anti-lightning mesh left exposed by peeling paint.

Qatar Airways has said that peeling and cracking paint on the wings of some A350s that it already operates has exposed copper mesh underneath designed to protect against lightning strikes. 

Qatar Airways has said that peeling and cracking paint on the wings of some A350s that it already operates has exposed copper mesh underneath designed to protect against lightning strikes. 

Backed by European regulators, Airbus has acknowledged quality problems on the jets but denied any safety risk from gaps in the protective sub-layer, saying there is ample backup.

Until now, the dispute has had a piecemeal effect on the order book for Europe's biggest twin-engined jet as first Airbus, then Qatar Airways terminated some individual jets.

Now, however, Airbus has told the airline it is striking the rest of the A350 deal from its books, the sources said, asking not to be identified as discussions remain confidential.

ALSO READ - Airbus revokes the delivery of another Qatar Airways A350

The youngest affected aircraft is just 3.41 years old, while the oldest grounded plane is 7.81 years old.

In end-June, the European planemaker had outstanding orders from Qatar Airways for 19 of the largest version of the jet, the 350-passenger A350-1000, worth at least USD 7 billion at catalogue prices or closer to USD 3 billion after typical industry discounts.

Airbus' shares were up 0.41% at 1401 GMT, having halved earlier gains.

According to data from ch-aviation.com, 26 Airbus A350 aircraft have now been grounded due to the spat. This includes seven of the larger Airbus A350-1000 and 19 A350-900s. The issue has affected aircraft across a range of ages. The youngest affected aircraft is just 3.41 years old, while the oldest grounded plane is 7.81 years old.

This includes seven of the larger Airbus A350-1000 and 19 A350-900s.

ALSO READ - Qatar Airways accuses Airbus of acting like a “bully” over ‘peeling paint’; files USD 1 billion lawsuit

The sweeping new A350 cancellation comes six months after Airbus also revoked the whole contract for 50 smaller A321neo jets in retaliation for Qatar refusing to take A350 deliveries.

ALSO READ - Airbus responds to Qatar Airways’s A350 dispute by cancelling A321 Order

The spillover to a different model was branded "worrying" by the head of a body representing global airlines, the International Air Transport Association.

The latest move is likely to widen a rift between two of the flagship companies of close allies France and Qatar. Barring an elusive settlement, the dispute is already set for a rare corporate trial in London next June. 

The sweeping new A350 cancellation comes six months after Airbus also revoked the whole contract for 50 smaller A321neo jets in retaliation for Qatar refusing to take A350 deliveries.

It comes as the airline industry grapples with an uneven recovery from the COVID-19 pandemic and as Qatar Airways is preparing to handle the bulk of some 1.2 million visitors expected for the FIFA World Cup in November and December.

Airbus has argued that the airline is using the dispute to bolster its finances and reduce its fleet of costly long-haul jets as its target long-haul market recovers sluggishly.

Qatar Airways, which in June posted its first annual profit since 2017, maintains it needs more capacity for the World Cup, forcing it to lease planes and bring less efficient A380s out of retirement to plug a gap left by grounded A350s.

Qatar Airways maintains it needs more capacity for the World Cup, forcing it to lease planes and bring less efficient A380s out of retirement to plug a gap left by grounded A350s.

The row centres on whether the A350's problems - including what appears to be damage to parts of the wings, tail and hull according to two jets seen by Reuters - stem from a cosmetic issue or, as the airline claims, a design defect.

ALSO READ - Airbus cancels more A350 orders of Qatar Airways

A Reuters investigation in November revealed that several other airlines had found surface damage since 2016, the second year of A350 operations, prompting Airbus to accelerate studies of an alternative mesh that also saves weight. 

So far, however, none of the A350's other roughly three dozen operators has joined Qatar in voicing concerns over safety due to surface flaws, as they continue to fly the jet.

(With Inputs from Reuters)

The Indian Government has activated bilateral air service agreements with 116 countries to increase and expand connectivity between India and nations around the world and is allowing foreign carriers to serve India and to add more flights to the country’s metropolitan cities.

The government has also said due to a significant imbalance in the number of points of call in favour of foreign carriers at present, it is not granting any non-metro airport as a new point of call to any foreign carrier to operate passenger services. 

Govt signs an agreement with 116 countries, to bring down airfare.

Indian designated carriers are free to mount scheduled operations to and from any international airport, including Kannur International Airport, under the ambit of the bilateral Air Service Agreement (ASA) concluded by India with foreign countries.

"Any designated foreign airline can operate to/from a point in India if it is designated as a point of call in the bilateral Air Services Agreement (ASA) signed between India and the country which has designated the airline."  Minister of State for Civil Aviation Gen VK Singh (retd).

Journey business consultants mentioned the federal government’s transfer will profit passengers and should carry down airfares.

Travel industry experts said the government’s move will benefit passengers and may bring down airfares. 

"It is good to have bilateral air service agreements with countries to increase seat capacity and have an open sky policy for foreign carriers as it will benefit passengers, the travel industry has been urging the government for quite some time that foreign carriers be allowed to operate from cities other than metro airports. Indian-designated carriers are free to mount operations from any city but a foreign carrier is not. Till the time it's not done, there will be a demand-supply gap which can impact prices," Anju Wariah, Director, Group Business Development, STIC Travel Group

The countries with which India has signed bilateral air service agreements include those in Asia, Europe, the Middle East and South America. 

The government on Monday, August 1 informed Rajya Sabha that private players are free to use drones for delivery purposes provided they comply with Drone Rules, 2021.

The Union Minister said that last year in September the Government notified the Production-Linked Incentive (PLI) scheme to promote the growth of drone manufacturing by private companies.

The government says the Drones Rules, 2021 provide the necessary regulatory framework for the commercial use of drones.

The government is already utilising the services of drone players for vaccine delivery, and inspection of oil pipelines and power transmission lines, among other things. Drones offer tremendous benefits to almost all sectors of the economy from agriculture to law enforcement.

Drones have also been deployed by authorities for the survey of mines and land mapping under the Centre’s ambitious Survey of Villages Abadi & Mapping with Improvised Technology in Village Areas (SVAMITVA) scheme.

Minister of State for Skill Development and Entrepreneurship Rajeev Chandrasekhar said that 126 industrial training institutes(ITIs) across 19 states have undertaken five short-term skilling courses on drone manufacturing, repairing and maintenance.

In April, food tech startup Swiggy shortlisted four drone startups – Garuda Aerospace, Skyeair Mobility, ANRA+TechEagle Consortia, and Marut Dronetech – to pilot its grocery delivery project in Bengaluru and Delhi-NCR.

ALSO READ - Uttar Pradesh to have a drone excellence centre

Gujarat is home to the largest number of such ITIs at around 20, followed by Uttar Pradesh with 15 and Assam with 14. Maharashtra is home to 12 such ITIs, while Andhra Pradesh has 11 such ITIs. 

ALSO READ - Swiggy teams up with Garuda Aerospace to begin trial runs using drones to deliver groceries

Startups and other private players have shown a lot of interest in the drone delivery space in recent times. In April, food tech startup Swiggy shortlisted four drone startups – Garuda Aerospace, Skyeair Mobility, ANRA+TechEagle Consortia, and Marut Dronetech – to pilot its grocery delivery project in Bengaluru and Delhi-NCR. 

The Centre has lately unveiled a slew of measures to spur the drone manufacturing sector. 

In January this year, Zypp Electric also announced that it would commence drone delivery of packages in five cities – Bangalore, Hyderabad, Mumbai, Pune, and Delhi-NCR. Piramal Foundation, in collaboration with Redwing Labs, also piloted drones for faster transportation of tuberculosis samples in Odisha’s Kalahandi in April this year. 

States such as Karnataka, Tamil Nadu, Rajasthan, and Punjab also tested long-range drone deliveries on a pilot basis in June last year. Telangana government had also partnered with hyperlocal delivery app Dunzo last year to pilot drone-based deliveries of medicines in the state. 

The space is populated by new emerging players such as ideaForge, Garuda Aerospace,  IoTechWorld, and Skylark Drones, among others.

The Centre has lately unveiled a slew of measures to spur the drone manufacturing sector. From liberalised drone rules to banning drone imports, the Centre aims to leverage ‘Drone Shakti’ to push emerging startups from the sector. 

According to a report, the Indian drone industry generated revenue to the tune of USD19.93 Mn in 2022. This number is expected to grow annually at a compounded annual growth rate (CAGR) of 10.12% between 2022 and 2027.