How IndiGo weathered the pandemic and joined a select global league of profit-making airlines
IndiGo, India’s largest carrier by fleet size and domestic market share, joined global peers in financial recovery in the third quarter of FY22.
The airline reported a profit of Rs 129.8 crore on Rs 9,294.7 crore of revenue from operations. This helped trim the nine-month loss to Rs 4,480 crore. This is the airline's first profit after seven straight quarters of losses and marks a much-deserved reversal from the loss of Rs 1,435.6 crore in second quarter of FY22. In days of gloom, a profitable quarter offers hope and is a sign of the times to come when the world returns to normal.
Along with the results came the announcement of co-promoter Rahul Bhatia being appointed as the managing director of the company, a hitherto vacant position.
The results were aided by a combination of factors such as higher utilisation, the opening up of tourism in India and beyond, passengers travelling for festivities and holidays, and a favourable change in government policies.
Removing restrictions
The government, which had capped capacity since the restart of flights, decided to withdraw the restriction, allowing airlines to operate their entire approved winter schedule. The change came into effect on October 18, 2021, which meant airlines were free to add flights based on demand. As a result, some airports saw more traffic than in pre-COVID times.
Additionally, states reduced or removed restrictions as vaccinations picked up speed. The cost of travel was reduced as double-vaccinated passengers were exempted from producing negative test results on arrival.
The fare-cap duration was reduced to 15 days on a rolling basis. Allowing airlines to price at will on the 16th day on a rolling basis meant that they could go back to stimulating demand by
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