IndiGo, the country’s largest airline, is looking to increase connectivity in non-metro cities, while continuing to expand international operations. The latter is expected to be a “substantial part” of its operations in the long term.

Around 11-12 per cent of the passengers it carried in FY22 were on international routes.

IndiGo had 1,450 daily departures across 73 domestic destinations and 15 international routes. It added eight destinations in FY22. In Q1 FY23, daily departures were above the pre-Covid levels.

Global expansion

“The removal of capacity restrictions in the second half of FY22, resulted in a see-saw recovery of air traffic. While the first half was again impacted, traffic rebounded in the second . This rebound continued into the first quarter of FY23 with daily departures above pre-Covid levels. The trends are highly encouraging and we remain bullish on our prospects,” Ronojoy Dutta, CEO and Wholetime Director, IndiGo, said in the company’s annual report for 2021-22.

The carrier will enter into strategic partnerships and cooperation agreements with more international airlines, as it looks to to gain access to new customers and markets. It has code-share agreements with five international airlines.

“To further increase our reach and connect additional international destinations from India, we have placed an order for Airbus XLR,” it said in the annual report. The A321 XLR is the latest and longest range variant of the A320 NEO, which has total passenger capacity of up to 244 passengers.

The management said, India’s aviation sector is on the path of steady recovery from “demand suppression caused by the pandemic” with both corporate and leisure travel recovering. However, a surge in fuel prices and weakening of rupee pose short-term challenges.

For FY22, the airlines reported a loss of ₹6,162 crore, while revenue from operations was at ₹25,931 crore. Load factor was at 73.6 per cent.

Impact of ATF

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Fuel expenses increased 153.1 per cent y-o-y to ₹9,696 crore last fiscal (FY22) versus ₹3,832 crore in FY21. Against this, there was a 54.9 per cent increase in capacity on a y-o-y basis, primarily due to increase in IOCL-ATF prices.

The cost per available seat kilometre (CASK) increased by 0.4 per cent, y-o-y to ₹4.60 in FY22.

The company’s debt was at ₹36,878 crore, including capitalised operating lease liability of ₹31,666 crore, as of March 31, 2022.

Phasing out A320 CEOs

IndiGo said, in order to bring down operating costs and improve fuel efficiency, the airline is working towards eliminating its “entire A320 CEO fleet” in a phase-wise manner by FY23. It has 41 A320 CEOs in its fleet.

As on March 31, the airlines had a fleet of 143 A320 Neo, 56 A321 Neo and 35 ATRs.

Airbus 320 NEOs are said to be 15 per cent more fuel efficient.

IndiGo has so far inducted 40 “fuel efficient NEOs” and redelivered 59 CEOs from its fleet, as a part of its fleet modernisation efforts

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