India’s leading domestic airline Indigo is once again witnessing a slow but sure upsurge in the demand for corporate travel in the country. Indigo turned profitable back in the December quarter of 2021 after the unprecedented events that followed due to the Covid-19 pandemic hampering all of the airline industry. According to Chief Strategy and Revenue Officer of Indigo, Sanjay Kumar, the airline had witnessed a 70% recovery of the corporate travel in the country but the arrival of the third wave of the pandemic led to a decline in business by up to 25% of that of pre-pandemic levels in the first half of January 2022.
The Current Scenario
Talking about the current scenario, Sanjay Kumar informed that the airline is once again witnessing a recovery in the demand for corporate travel after the middle of January. He said that the airline has already seen some good numbers coming in and expects further growth in the coming few weeks. The CEO of Indigo airline Ronojoy Dutta said in a statement that the airline expects a declined revenue in the March quarter of 2021, however, is hopeful about a full-fledged recovery in the first quarter of the next financial year owing to a rebound in the demand.
The CEO informed that the airline is expecting a 10% - 15% less capacity deployment in the March quarter as compared to the December quarter. He also added that the load factor of the airline in the fourth quarter could also witness a drop as compared to the December quarter. He also added that it was the recovery in the demand that led to the airline adding capacity resulting in Indigo turning profitable in the December quarter.
Talking about the challenges the airline is facing as of now, Dutta informed that to bring the unit cost down, the airline needs a fair amount of capacity. He said that relaxation in restrictions imposed on international travel is also necessary. Talking about the fuel situation in the country as a significant problem, the CEO said that the airline is in high fuel and tax environment. As far as the competition in the industry is considered, Dutta said that Indigo aims of becoming a world-class airline without giving much care to the competition and focusing on its own improvement.