Rahul Bhatia is now IndiGo’s MD, airline swings to Q3 profit
“I would describe Rahul as a restless and driven entrepreneur, who is always looking for bigger and improved opportunities in any business or venture,” said Dutta.
“For example, our initiative into Cargo, as well as the entire digitisation in the last couple of years were spearheaded by Rahul. We are now entering a new phase in our journey, with more international and long-haul flights. In this evolving and exciting environment, strengthening the thought leadership in the company is a timely and welcome move,” he added.
The announcement also comes a month after the shareholders of IndiGo approved a resolution seeking an amendment to the Articles of Association of the company, some of which give one founder the first right to purchase the other’s shares in the company if the latter decides to sell. This happened after years of feud between Bhatia and co-founder Gangwal who has stopped participating in the airline’s operational and financial decisions.
IndiGo’s revenue for the quarter soared 90% to Rs 9,295 crore. This was primarily because of a big hike in ticket prices on international flights. Demand for international travel has increased and capacity remains limited as the government has still barred regular foreign flights. Only those under bubble agreements–small bilateral agreements between countries–charters and for evacuation purposes operate.
Yields increased by 5.2%.
IndiGo’s free cash position also improved by Rs 1,500 crore to Rs 7,814 crore.
“We believe that IndiGo’s strong cash position would help in sustaining its market share along with pricing power, going forward, which would drive its overall profitability. It is best play to capitalize on the fastest-growing Indian aviation sector,” said a note from Reliance Securities.
In a conference call with analysts, Dutta said air traffic on IndiGo’s flights had reached pre-Covid levels before December 15, post which they were hit by scares of the new variant of the virus, Omicron. Infections have however been mild and cases have started to decrease leading to rise in demand again. Corporate travel had reached 70% of pre-Covid levels but thereafter fell to 25%, said Sanjay Kumar, chief strategy and revenue officer at airline.
The airline is rolling back its salary cuts and sweating its planes more, from 10 hours a day to 14.
It plans a big push on its cargo business and plans to induct four aircraft converted from airliners to freighters.