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00:00 Well it is India's largest airline and it is an airline that has done remarkably well
00:04 in the recent past.
00:06 Indigo has just announced its quarterly results.
00:09 The numbers are fairly staggering.
00:11 Revenue from operations is up at 29.8 percent.
00:16 The load factor is at 88.6 percent.
00:18 That's up from 79.6 percent last time around.
00:22 Profit significantly for the airline is up at 236 percent.
00:27 Now these are just statistics but the story of Indigo as it continues to grow in this
00:33 hyper competitive market which is the Indian civil aviation sector is something which is
00:38 truly remarkable.
00:39 We've got a very special guest, the CEO of Indigo, Mr. Peter Elbers.
00:43 Thanks very much Mr. Elbers for being with us.
00:46 First question, is it pent up demand that we are seeing which has resulted in so many
00:53 more passengers on your flights or is this finally a return to normal which obviously
00:59 we didn't see during the COVID period?
01:03 Good evening.
01:04 Thank you.
01:05 Thank you so much for having me and obviously a happy and pleased CEO sitting in front of
01:10 you if we can announce these results.
01:14 To your question really, we see that the market actually is back and not only this quarter,
01:20 this is our third consecutive quarter.
01:22 We are back into the black numbers and the Indian market is probably one of the quickest
01:28 markets in the world recovering post COVID and is now having numbers and posting numbers
01:33 for the overall market which is significantly higher than the situation prior to COVID.
01:38 So I wouldn't call it pent up demands.
01:41 That may have been the case by the end of '22.
01:44 I think today here we really see a combination of an Indian economy which is doing very,
01:52 very well, foreign investments in India, Indians going abroad, Indians going for study, family
01:59 in France, local business which is growing and that all comes together in a very strong
02:05 traffic demand.
02:06 Basically, at Indigo, I think we're in a good position to benefit of that strong market
02:12 and see the result of many of the actions and initiatives which we have taken over the
02:15 past year.
02:16 Mr. Elberts, you know, when it comes to Indigo, there are so many questions which so many
02:21 of our viewers want to know.
02:23 And so I thought we'd ask you fairly basic questions, get your answers in on them.
02:28 So my first question is this, is Indian aviation essentially headed, in your opinion, for a
02:34 duopoly type situation, Indigo and an expanded Air India?
02:40 Well, Indian aviation is obviously going through a transition phase.
02:45 And again, here, I think we should have a little bit more of a global view almost.
02:50 And of course, we're here in India itself.
02:53 And we look at it from an Indian perspective.
02:55 But if you take a step back for a moment, and you see that the most populous nation
03:00 on the planet, in fact, should have airlines which are representing the size of that population
03:07 and representing the size of that economy.
03:10 And the consolidation which is now taking place partly under the Air India group, and
03:15 of course, the growth of Indigo itself, is actually what we have seen in other parts
03:20 in the world, where largest players emerge.
03:24 And these larger players need to be large in order to compete and in order to be able
03:30 to compete with some of the mega carriers in the world.
03:33 And the share and I'm sorry, I'm taking a bit of time for this answer, but the relative
03:38 share of Indian carriers on international traffic is still relatively limited.
03:42 And in order to regain some of that share, we need to grow and we need to have a sizable
03:47 presence and there, the combination of a strong domestic network with a growing international
03:52 network will help us to compete and will make sure that the Indian carriers can regain some
03:57 of that international share.
04:00 Has Indigo benefited by the collapse of Go First?
04:03 And I ask because you've got aircraft more readily available than perhaps any other airline.
04:10 And at the same time, you want to attract the talent which exists in that airline.
04:14 In other words, pilots who operate the same aircraft, cabin crew, but potentially engineers
04:19 as well.
04:20 So, is this something which has come, you know, as a benefit to you at a time when you're
04:24 trying to grow?
04:25 Well, overall, I would say the suspension of the flights of Go First, of course, created
04:33 some sudden disruption in the markets and sudden disruption of capacity.
04:38 Having said that, Indigo today operates almost 500 routes, a little over 400 domestic and
04:47 some 80 to 90 international.
04:50 If we look to that domestic network, the overlap, you know, if you look at Go First, what percentage
04:57 of our domestic routes were also operated by Go First?
05:01 It's below 20%.
05:03 So when it comes to that market, I think Indigo by now is covering so many routes that we
05:09 basically continue to build on that strong market position.
05:13 When it comes to the labor markets, again, here, India, very different than some other
05:19 parts of the world, is really in a position where there's still a lot of potential out
05:26 in the markets and a lot of actually new people joining the labor market and youngsters looking
05:32 for jobs.
05:33 And we have a fantastic training institute at Indigo.
05:36 We train about 2000 people a day for the growth of our airline.
05:42 So yes, we have seen some moves from Go First, but I would say the core of what we're doing
05:48 at Indigo is still provided by our internal training program and our internal training
05:54 center.
05:55 So do you have a number of people who have come in from Go First?
06:00 No, I would not be able to have a precise number.
06:05 There's always fluctuations in the market, so I would not be able to have a precise number.
06:09 But again, we are expecting to hire in the range of 5000 people this year.
06:15 So look at the size of what we are doing.
06:17 We train 2000 a day for different programs.
06:20 So again, here, the Go First people joining, I wouldn't have a precise number.
06:27 But if we look to the total scale of growth we're growing, the majority of our growth
06:33 is coming from outside anyway.
06:35 There have been recent concerns, Mr. Elbers, on security and safety, and that obviously
06:42 is your primary concern as an airline.
06:44 You've been fined recently.
06:45 A couple of your pilots have had suspensions as well.
06:48 Tail strikes, I think, four in six months.
06:51 Should passengers be concerned?
06:53 A basic question.
06:56 Let me reiterate where you started with safety is our key priority.
07:00 Number one, number two, and number three on our priority was, is, and will continue to
07:05 be safety.
07:08 And Indigo has actually a very strong track record when it comes to safety.
07:14 Then we had the four tail strikes over this past six months.
07:18 These tail strikes are to be reported and we're fully transparent on that part.
07:23 So there's no hiding.
07:25 These are being transported, sorry, reported and are also being investigated.
07:30 And based on these investigations, we take appropriate measures or corrective measures
07:36 or adjust our procedures, which is a continuous process in improving our safety.
07:41 We have recently indeed received a writing from the DGCA.
07:45 We of course take that very serious and today we're in the process of evaluating the precise
07:51 note we received from the DGCA and then we'll determine what is our next step on that.
07:58 Meanwhile, as I mentioned, we continuously review our procedures, our safety.
08:03 I mean, we have grown to an airline with 1800 flights a day.
08:08 That's looking at the global size.
08:10 That is something like the seventh or the eighth largest in the world when it comes
08:13 to daily departures.
08:15 So we have a massive operation and we continuously evaluate how we can keep that operation to
08:22 the highest safety standards, which Indigo actually is known for all these years.
08:27 There's a report which came out a few days back in The Hindu, which said that there was
08:30 pressure on pilots to ensure maximum fuel efficiency, which is possibly why the aircraft
08:36 are not ideally configured in their flap setting when they make a landing, pilots possibly
08:42 coming in to save fuel.
08:44 How would you respond to that?
08:46 Well, let me be clear.
08:48 At the end of the day, always the pilots have the call on what landing configuration they
08:53 use and it's at the pilots eventually, it's a pilot's discretion to use the landing configuration
08:59 and to configure for that.
09:02 Then of course, we have internal procedures which are matching to what the industry standards
09:08 are, which are allowing different variations of operational procedures.
09:15 And in those operational procedures, we've taken into consideration all possible elements.
09:20 But at the end of the day, again, here it is the pilot who is deciding what is the precise
09:25 configuration for landing.
09:26 And we use the different configurations which are allowed by the aircraft manufacturers.
09:33 Do you agree with the DGCA fine and the action they have taken?
09:38 Or do you believe it's something that you might challenge?
09:40 Again, we are reviewing today what exactly has been said.
09:44 I don't think we should go into public in sort of commanding what the DGCA said.
09:50 We're reviewing that now.
09:52 And based on that, we'll engage with DGCA.
09:56 As per the process, there's a process laid out when you receive such a notice, what you
10:00 can do, what is the timeframe for that, what's the appropriate steps.
10:04 And I think an airline of our size and our skills should just follow the steps which
10:07 are pre-described by the DGCA.
10:10 And we do that as such.
10:11 Mr. Elvis, let's talk about the future because it's exciting for Indigo, isn't it?
10:17 And I must ask you this, is Indigo looking to acquire twin-aisle long-range jetliners?
10:21 I'm not talking about the short-term acquisition of triple sevens.
10:25 I'm talking about, are we going to see, who knows, A350s or Dreamliners?
10:30 That was a rumor in Indigo colors, twin-aisle aircraft in the future.
10:34 Yeah.
10:35 Well, the good news is there's rumors every day.
10:39 But to your earlier question, I mean, yes, the future is exciting.
10:45 India today, I would dare to say, with a lot of confidence actually, is the most vibrant
10:50 aviation market in the world.
10:53 Being at the IATA conference in Istanbul two months back, all eyes were on India.
10:58 If you just look at the air show, which recently took place in Paris, there was, of course,
11:03 the earlier order of Air India.
11:06 And then Indigo was in a position to order another 500 narrowbody aircraft, Airbus 320
11:13 family, which is the highest number ever ordered as a single aircraft type of any airline by
11:20 Airbus.
11:21 And again, I think that speaks to the potential of India, speaks to the potential of Indigo.
11:26 If we look to the geographical position of India, we are very well positioned not only
11:30 for the Indian market itself, but also for international travel.
11:34 And as such, we're expanding very significantly international.
11:38 Over the next few weeks, we're adding another six international destinations.
11:42 Two days from now, we start flying Mumbai to Nairobi.
11:45 It's the first time actually Indigo will be touching on African soil.
11:50 So look at that from a network perspective.
11:54 Two days later, we start our flight to Jakarta.
11:57 Two days later, we start our flights into Central Asia from Delhi.
12:01 So we're actually actively building up that network.
12:04 Then we have Airbus 321XLR on order as well.
12:09 They will be coming end of 24, maybe early 25.
12:13 That will be the next step.
12:14 They will bring us further into Europe and will bring us also further into Asia.
12:19 We've kept always all options open for after that.
12:22 I would like to sort of stick to that position today.
12:25 We have a firm planning and agenda for our 321 family, for our XLRs and whatever comes
12:32 next, we have not ruled out anything and we keep all options open towards the future.
12:39 In fact, the XLR was my next question.
12:40 There have been range issues with the A321XLR.
12:44 Is Indigo worried about the orders that you've placed or the faith that you've placed on
12:49 this variant?
12:50 Because for example, Delhi to London direct on the basis of the reconfiguration or the
12:55 redesign of the additional fuel tank, some would suggest might be a problem.
13:02 Yeah, I've read the very same reports as you're referring to.
13:06 And of course, we're in close contact and communication with Airbus on what's going
13:10 to be the precise configuration and what's going to be the precise range.
13:15 And of course, we've looked at these aircraft and we've taken a position for these aircraft
13:20 based on a certain range.
13:22 I think it would be a bit premature today to precisely say which routes could be operated
13:30 and could not be operated.
13:32 That really depends on Airbus.
13:34 It also depends actually on our configuration, what's going to be the precise number of seats,
13:38 what's the routing take place.
13:40 Having said that, I think there's a lot of routes, even in today's network.
13:43 Let me come back to the earlier example.
13:46 We start now flying Mumbai into Nairobi.
13:50 We cannot fly with today's aircraft Delhi into Nairobi.
13:54 We could fly with Airbus A321XLR Delhi-Nairobi.
13:58 So if we park the whole London story for a moment, I think there's still a lot of opportunities
14:05 in the range of six to seven to eight hours, which irrespective of the precise outcome
14:10 you're referring to, would offer great new opportunities for us to fly out of Delhi,
14:16 Mumbai, Hyderabad, Bangalore.
14:18 All these great Indian cities will have a lot of potential for us to further build our
14:22 network.
14:23 I mean, take Singapore, we fly out of seven different cities in India to Singapore.
14:28 So we could even stretch that further into Indonesia.
14:31 We start flying now from Mumbai into Jakarta with the XLR Delhi-Jakarta could be another
14:36 option.
14:37 So we start adding and building on that network internationally.
14:41 But you would agree, Mr. Elbers, that West Europe would be a problem given what we're
14:45 hearing about the XLR.
14:47 I think that's really too early to say that.
14:52 If I were to comment on every speculation in the media, what's going to be the precise
14:57 range of an aircraft that would pretty much consume half of my day.
15:02 So I really prefer to wait for the definitive outcome of Airbus, get the information from
15:08 the manufacturer, then run our systems and the exact configuration of our aircraft, and
15:13 then decide what's going to be the precise range of these aircraft.
15:17 A broader question, and I ask because with 1000 odd aircraft on order, one needs to know
15:23 this.
15:24 What is the infrastructure to support IndiGo's growth?
15:27 Well, yeah, that's a very fair question.
15:30 But I think with this order and here, I'm actually very pleased with what's happening.
15:37 We have now the new airports in Noida coming up.
15:42 We'll have the new airport in Navi Mumbai coming up.
15:46 Existing airports are expanding.
15:47 I mean, take Goa as an example, the new airport in Goa opened, Goa Mopar Airport in Jan of
15:54 this year.
15:55 I had the privilege of being at the inaugural and there were quite some concerns.
15:59 What will happen with the existing airport and will it reduce and will it keep the flights
16:03 and what does it mean for the local economy and so on and so forth.
16:07 The reality is actually that we kept operating pretty much all our existing flights at the
16:15 existing airport of Goa and we have added dozens and dozens of flights to the new one.
16:21 So the investments in infrastructure are, I would say, are now really taking off in
16:25 India and rather than looking to each other, airports to airlines and airlines to airports,
16:32 we have now a firm order book and not only us, but also India.
16:36 So Indian airlines are having now a firm order book, which should give the airports enough
16:40 confidence to start building and expanding the airports.
16:44 And I guess in the past there may have been a little sort of chicken and egg.
16:49 Are there enough planes or is there enough airport capacity?
16:52 Today it's clear the airlines are embarking on a path of growth and with that the airports
16:58 can start helping to create the infrastructure there.
17:01 And from that angle, actually, I'm very pleased also with all the efforts the government is
17:07 putting in.
17:08 And again, if you take a global perspective, the agenda of the government to move India
17:16 further onto the global stage and to, I would say, its rightful place and the hosting of
17:22 the G20 and all the policies attached to that.
17:25 Many states are reducing their ATF taxes, aligning them.
17:31 So all these policy changes of the government, the push for the government to open up new
17:35 airports, the UDAAN scheme, that's all helping really to push, I would say, a common agenda
17:42 forward.
17:43 And IndiGo can only be happy and proud and humble to be part of that agenda and help
17:49 to implement and bring the country forward.
17:51 Mr. Elber's two questions as we wrap up this discussion, a very passenger-centric sort
17:58 of question.
17:59 And I think I'm asking this myself.
18:00 Will we ever see in-flight entertainment systems on IndiGo aircraft?
18:04 Again, my standard response to pretty much everything is we're not ruling out anything.
18:13 Again, IndiGo has developed, has evolved over time.
18:17 If you take, for example, when we started this week, we celebrate our 17th anniversary.
18:23 Think about that.
18:24 17 years ago, we had one flight starting.
18:27 And today we operate 500 routes, 1,800 flights a day.
18:31 And we welcome this year, this quarter, a record of 26 million customers in a quarter.
18:36 And as recent as May, we had a record of three lakh customers a day.
18:39 So we evolve over time.
18:41 And with that evolving, we are further upgrading our loyalty program, for example.
18:45 That's a customer question.
18:47 We have one today, which is linked to a credit card.
18:50 We're further developing and evolving that.
18:52 So I'm not ruling out anything.
18:55 With that, maybe just a quick reaction.
18:58 If I see the number of customers on the plane, especially in a digital savvy country as India,
19:04 who is all having their own phones, some of them even two, it is actually more likely
19:09 to develop in that range for domestic flights rather than anything else.
19:14 And a final, final question.
19:15 500 aircraft on order.
19:18 You are the key person involved in all of this.
19:22 Negotiations must have gone on for months.
19:24 Were you tense?
19:25 Were you nervous?
19:26 Were you worried?
19:27 Were you thinking, oh, my God, we are committing so much.
19:29 What if the market doesn't really develop?
19:31 What if aviation turbine fuel goes out of control?
19:34 Could you share with us some stories that you've not said anywhere else about, you know,
19:39 the negotiations themselves?
19:41 I mean, it would have taken a toll on you.
19:44 Yeah, well, the good part and thanks for that more personal angle to the talk.
19:51 I really appreciate that.
19:54 The good part here is that Indigo and I'm one year here now, but at Indigo, we have
19:59 a fantastic team and colleagues working on that.
20:02 So none of our steps like this is a sort of single, single person operation.
20:08 There's a vision from the promoter.
20:11 There's a board which is supporting it.
20:13 And they're wonderful and very strong and experienced colleagues doing that.
20:16 So as a team, you embark on such a negotiation.
20:20 And as every negotiation, you have ups and downs and moments of frustration and moments
20:26 of happiness.
20:28 What I can share when I was sitting in Paris with the Indigo team and together with the
20:33 Airbus leadership and basically presenting there an order of 500, I could only feel extremely
20:42 proud of what we are doing.
20:44 And the fact that even in the in the recent visit of the Honorable Prime Minister into
20:49 Paris and the guest of honor, it just demonstrated and underlined the position of India on that
20:56 stage and to be to be part of that road story together with all my colleagues at Indigo.
21:01 That's that's it's a humbling and yet very energizing experience.
21:06 Mr. Elberts, congratulations.
21:08 Fantastic quarterly results.
21:09 And, you know, I mean, Indigo and India's plans for the future in aviation, they seem
21:13 so closely tied.
21:15 Thank you very much for speaking to us.
21:25 [BLANK_AUDIO]
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