IndiGo says the immediate financial impact from the ongoing conflict between India and Pakistan remains “limited”, with forward bookings on a steady rebound after seeing a “sharp decline” in early May.
Speaking on an earnings call on 21 May, IndiGo finance chief Gaurav Negi says the airline is seeing booking cancellations stabilise in recent days, after weeks of uncertainty.
India and Pakistan were embroiled in an armed conflict following a militant attack in the Kashmir region on 22 April, which killed 26 people, mostly tourists from other parts of India.
The conflict prompted Indian carriers to cancel flights to the affected region, and reroute several west-bound flights to skirt airspace closures over Pakistan.
Negi notes that between 22 April and “a few days back”, the “booking trends have taken a sharp decline”, but have now “started to uptick”.
“To what extent it’s going to bounce back, and how quickly it’s going to bounce back is something that we are monitoring, but at least…from our vantage point, we’ve seen the worst [in terms of cancellations],” he adds.
Meanwhile, airline chief Pieter Elbers says that while there have been operational changes – the airline had to suspend Central Asia operations due to the closure of Pakistan airspace, for example – the overall impact “is relatively limited”.
Elbers says: “We [operate] around 2,200 daily flights and [there are] a total of 34 being affected [by having to add flying times of] within the range of 20 to 30min. There’s an impact financially when it comes to bringing additional fuel, but if you look at the overall scheme of things at IndiGo… the impact for us is relatively limited.”
For the year ended 31 March, IndiGo reported a pre-tax profit of Rs75.9 billion ($882.9 million), down 5.7% year on year.
Total revenue grew around 18% to Rs841 billion, against a 13% rise in passenger traffic. The revenue increase was however outpaced by a 21% rise in operating costs to Rs765 billion.
For the quarter to 31 March, the low-cost operator improved its profitability, with pre-tax profit up 79% to Rs31.7 billion.
