Aneesh Phadnis Forum Gandhi
7 Nov 2023
Our biggest priority is building our base to get one aircraft every week, says the airline's chief executive officer Pieter Elbers
IndiGO CEO Pieter Elbers has steered the airline to four consecutive quarters of profit, including the first profitable second quarter in five years.
The airline's on-time performance has improved, it is stitching new partnerships with airlines, and is designing a loyalty programme. But an issue with powder metal in the geared turbofan engines powering its Airbus A320Neo aircraft threatens to slow the growth of India's largest airline. But Elbers tells businessline that he remains confident of overcoming the crisis. Excerpts:
IndiGO's load factors have been lower than competition ? Is this because of the fuel surcharge ?
It is too early to come to a full evaluation on the fuel surcharge. There's obviously a mixture of some very established routes, but we've added many more new routes. We have really expanded our network.
We do have a lot of Airbus A321 aircraft that have more seats available and, as such, that leads to potentially slightly lower load factor.
How are you mitigating the supply chain disruption ?
Our long-term aspiration is to double our size in a decade. None of the recent announcements have made any change in the ambition. We have an aircraft being delivered almost every week. We have taken a lot of mitigating measures; the two wide body planes, which we are operating; the wet leases; and other lease extensions that we've done.
And all that has really helped us to live up to our capacity guidance. IndiGo is very well-positioned to deal with issues, global supply chain challenges.
Will fares continue to be elevated ?
The fuel surcharge was linked to global rising fuel prices. We cannot predict on that front, given all the geopolitical developments going on. Airfares are also a function of demand and supply. We have seen them fluctuating, depending on the demand. Seasonally, it will continue tp fluctuate around Diwali and Christmas. They will go down in the lower season, that's the trend globally.
Any guidance on induction of Airbus A321XLR aircraft ?
We maintain our range for the end of FY24 or early FY25. For now, our largest priority is building our base to get one aircraft every week. Post that, we will prepare to build our network on the XLRs. Currently we have 115 destinations, and we will take it to 118.
We have added routes like Mumbai-Nairobi and Mumbai-Jakarta. I think where the XLR will also help is that Mumbai-Nairobi could be supplemented by Delhi-Nairobi, and Mumbai-Jakarta could supplemented with another route. XLRs will give us an opportunity to build on some of the stations we have opened today, but serve them from different Indian mega cities.
Has the company made any decision on the business class product on XLRs ?
The answer still remains that we do not have a decision on it yet
Are you also looking at inducting more pre-owned ATRs for regional routes?
We added three ATRs in the previous quarter, and we will continue to do so. Hyderabad is our largest base for ATRs, but we have been adding ATRs not only for udaan routes, but also smaller routes as well.
For example, Delhi-Dharamshala. Getting new ATRs into our fleet is a part of that mitigation plan.
The Ministry of Consumer Affairs has said that airlines are making it difficult for customers to have free seats during Web check-in
I would prefer to keep discussions between ourselves and the government private.
Having said that, there is a bit of differentiation between what is the actual practice and what we are communicating [to customers].
We continuously monitor and review what is the best way. We are in the process of reviewing and evaluating that.
We are sharing it with the government and addressing the questions.
What about the order for wide-body planes? Are you planning to order more planes ?
We keep all options open for the future. We have the world's largest portfolio of fleet order - 970 planes on order.
What is important for us is that aircraft from our initial order (470) will be delivered by the end of the decade, and that has made us confident to say that we will double our size by the end of the decade.