India's IndiGo seeks partnerships to expand international network
By Aditi Shah and Sethuraman N R
BENGALURU (Reuters) -InterGlobe Aviation Ltd, the operator of India's leading airline IndiGo, is seeking partnerships that will allow it to expand its international network, its chief executive said on Friday, after the company returned to profit.
The airline's international capacity is already at 105% of pre COVID levels and it plans to grow this further in 2023, Pieter Elbers told analysts in a results call.
"We will continue to explore strategic partnerships in the future that will allow added connectivity for our customers and provide us with more global visibility," he said, adding that international destinations are opening at higher levels than before the pandemic.
IndiGo's code share agreement with Turkish Airlines and Virgin Atlantic has increased connections to Europe, where the Indian carrier is adding capacity to meet growing demand for air travel.
The global push by the airline, which holds the biggest share of the Indian market, coincides with efforts to expand by rivals.
Air India, under its new owners Tata Group, is finalsing a jumbo plane order to increase its services in the country and overseas.
IndiGo reported an 11-fold jump in quarterly profit led by increased demand for domestic and international air travel despite high fuel costs and currency volatility.
While IndiGo expects capacity, measured in available seats per kilometre, to be "north of mid-teens" for the fiscal year starting April 1, it continues to face disruptions with several planes grounded due to lack of spare parts.
It said in November it had grounded around 30 aircraft, or 10% of its fleet, and the airline's Chief Financial Officer Gaurav Negi said a similar number of planes were still not operational.
To mitigate the impact, the airline has extended some existing leases and is also taking aircraft on 'wet lease' - an arrangement whereby the lessor maintains operational control of flights while providing aircraft and crew - Negi told analysts.
The grounded planes have a financial impact and IndiGo is working with suppliers to get "adequately compensated", he said, without giving figures.
The company's profit was 14.18 billion rupees ($173.22 million) for the quarter ended Dec. 31, from 1.28 billion rupees a year earlier. Revenue from operations rose 61% to 149.33 billion rupees.
Yields, a metric for profitability, increased 21.9% to 5.38 rupees per kilometre from a year earlier, while the carrier's load factor, or the passenger carrying capacity being utilised, improved by 5.4 percentage points to 85.1%.
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Dhanya Ann Thoppil and Barbara Lewis)