Leading LCCs in India including IndiGo and SpiceJet are looking forward to starting long-haul flights, which are expected to offer cheaper fares for the passengers
Low-cost carrier (LCC) IndiGo, which reported over 50% jump in its third-quarter net profit on Wednesday, said it will be seeking route rights and other regulatory approvals from the authorities in order to operate certain international long-haul flights.
These approvals, if granted, will shape the airline’s future plans for international operations, it said.
Leading LCCs in India including IndiGo and SpiceJet are looking forward to starting long-haul flights, which are expected to offer cheaper fares for the passengers. These domestic carriers are eyeing long-haul flights considering the huge feed they would get from the domestic market which is among the fastest growing in the world.
“We will go ahead and apply for some route rights. A lot depends on what happens after that”, said company officials in an analyst conference call.
The airline management said that they are awaiting details of Air India disinvestment as they remain interested in the long-haul operations of the airline. IndiGo, which had expressed its interest in bidding for the debt-laden national carrier, said that it will go ahead with its future plan, irrespective of whether it wins the bid for the airline or not.
IndiGo is betting on 24% addition to capacity in the coming months due to increase in its fleet on the back delivery of planes.
Meanwhile, parent InterGlobe Aviation Ltd also became the biggest winner of the second round of the government’s UDAN scheme, bagging 20 routes.
The airline has reported a net profit of Rs 762.03 crore for the three months ended December on the back of better revenue management, easing out of the effect of demonetisation which was severe in the corresponding quarter last year and credit from manufactures as compensation for the grounding of planes due to engine problems.
“Profitability for the quarter was favourably impacted due to better revenue management as well as credits received from our manufacturers,” the duo added during the conference call.
When asked whether compensation from the manufacturer would continue in coming quarters, chief financial officer Rohit Philip said the problem was related to spare engines and it has been solved now, and therefore, all affected planes are operational.
Philip added that any further compensation would depend upon the nature of the operations that get affected. On increasing crude prices and how they are going to affect the airline’s bottomline and the airfares, the airline management said that historically, the increase in fuel prices gets passed on to the customer but not fully and “a lag always remains”.
Aditya Ghosh, president and whole-time director, InterGlobe Aviation, added that he does not see the ongoing low prices offered by the airlines as ‘price-war’ but just as a part of routine business strategy to stimulate the demand from the market.
(With inputs from PTI)
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