Indigo says the immediate financial impact of the ongoing conflict between India and Pakistan remains “limited”, with progressive bookings continuing with steady rebounds after seeing “sudden decline” in early May.
Speaking about the May 21 revenue call, Indigo's finance director Gaurav Negi says the airline has seen cancellation bookings stabilize on a recent day after weeks of uncertainty.
India and Pakistan were caught up in an armed conflict after being attacked by extremists in the Kashmir region on April 22, killing 26 people, mostly tourists from other parts of India.
The conflict has led Indian airlines to cancel flights to affected areas and have rerouted several westbound flights to skirt airspace closures over Pakistan.
Screw points out that “the reservation trend has suddenly decreased” between April 22nd and “a few days in advance,” but now it has “begun to increase.”
“It's something we're keeping track of how much it bounces back and how quickly it comes back, but at least… from our advantage, we've seen the worst (in terms of cancellation) happening,” he adds.
Meanwhile, airline chief Peter Elbers said that despite operational changes, the airline had to suspend operations in Central Asia due to the closure of Pakistan's airspace. For example, the overall impact is “relatively limited.”
Elbers said: “We (we operate) 2,200 flights a day, with a total of 34 impacts within the 20-30 minute range (we have to add flight times). There is a financial impact when bringing additional fuel, but looking at Indigo's overall scheme, our impact is relatively limited.”
Indigo for the year ended March 31st reported pre-tax profits fell 5.7% year-on-year to Rs 75.9 billion ($882.9 million).
Total revenues rose by around 18% to Rs 84.1 billion, with passenger traffic rising by 13%. However, revenue growth has risen by 21% to Rs 765 billion.
From the quarter ending March 31, low-cost operators have improved profitability, with pre-tax profits increasing 79% to Rs 31.7 crore.
