Amid tensions in the Middle East, airlines have been scrambling to maintain operations as rising fuel costs put pressure on the aviation industry. IndiGo is looking to increase airfares to offset the soaring fuel bill, the airline’s chief executive officer said.
“We have no choice but to look to increase fares in an effort to offset the very significant increase that we have seen in the fuel bill,” Walsh said during a virtual media briefing on Thursday, responding to a question about rising airfares and their impact on passenger demand.
The development comes as India’s largest airline reported a loss of Rs 1,879 crore in the September quarter despite a sharp rise in revenue. While the airline narrowed its losses compared with the year-ago period, mounting operating expenses have continued to put pressure on its profitability.
However, IndiGo intends to minimise fare increases, citing its low-fare model, which has been a key driver of growth in the Indian aviation market.
“Obviously, we want to try and minimise the increase in fares that we are encountering. It has always been the case that India stimulates a lot of additional growth through the low fare that IndiGo has been able to offer in the market,” Walsh added.
According to reports by media outlets, InterGlobe Aviation, the parent company of IndiGo, reported a loss of Rs 1,879.1 crore in the second quarter of the current fiscal year, compared with a loss of Rs 258.1 crore in the corresponding period a year earlier.
In its regulatory filing, the airline’s total income reoported a rise to Rs 24,311.9 crore in the September quarter from Rs 19,599.5 crore in its second quarter previous year. However , the increase in income was offset by a steep rise in expenses, particularly those related to aviation turbine fuel (ATF).
Despite mounting pressure on operating expenses, Walsh said IndiGo’s efficient cost structure and strong liquidity placed the airline in a relatively strong position to navigate the challenging environment.
He added that the airline could further trim some expenses, although its existing cost base was already efficient.
IndiGo operates a fleet of more than 400 aircraft and runs over 2,200 flights daily, connecting 140 destinations, including 40 international destinations.