Indigo Optimistic About 2022 but Very Carefully Watching Trends

Rising domestic passenger traffic along with healthy response to its new intra-regional flights has boosted airline major IndiGo's outlook for 2022.

Nevertheless, the airline remains 'cautiously optimistic' on the impact the Omicron Covid-19 variant might have on the country's aviation sector.

Sanjay Kumar, Chief Strategy and Revenue Officer, IndiGo mentioned in an media interview that the airline has almost reached 100 per cent pre-Covid capacity utilisation level.

"The year 2020 and 2021 have indeed been very challenging for not just the aviation and travel industry but the global economy, and it is the economy which drives demand for our business," Kumar was quoted.

"The domestic traffic has been good and has grown very strongly in recent months as restrictions and the pandemic eased. Things are improving gradually, and we are almost back to domestic pre-Covid capacity as well, though international travel may take a little longer."

On intra-regional connectivity, Kumar said that the airline is focusing on connecting India's large, mid-size and small cities.

"We are continuously exploring new opportunities across the length and breadth of the country and expanding our network as per the demand."

"We are closely monitoring the current trends across air traffic, train passengers as well as economic situation. Based on all these factors and various demand estimates, we are working on new routes and flights."

Recently, the airline witnessed encouraging demand during the festive season.

"With enhanced regional connectivity, we are sure that people will prefer air travel now more than ever. We have seen a very strong festive season and our system capacity was highest ever than even pre-Covid times on November 8."

"So, there are some good things happening on capacity and revenue. We are already at 1,500 flights per day which is equal to our pre Covid levels. Also, with the upcoming holiday season and people looking forward to exploring the country, we are expecting stronger domestic demand and we remain optimistic going forward."

Besides, he cited that the positive demand trend has become self-sustaining over the last few months.

"We have analysed the traffic every month and the trends are up, and it is encouraging that the demand is sustaining now, with the travel trend going up in terms of unit revenue and future bookings."

"The demand has certainly picked up in the festive season and we hope for it to continue the upswing. Domestically our capacity now is higher than in pre-Covid times. We are getting above 80-85 per cent load factor so yes; traffic is coming back encouragingly."

However, he added that the airline has been seeing challenges in terms of international services coming back with the emergence of another strain and many countries including India reinstating stringent protocols and restrictions for travel.