Aviation: Indigo CEO Rahul Bhatia wants staffers to help cut costs

IndiGo co-founder and interim CEO Rahul Bhatia urged airline employees Wednesday to help reduce costs further besides being courteous, after parent IndiGo reported the first-ever quarterly loss at Rs 652.1 crore in September following its listing in November 2015.

Bhatia, in an e-mail to the employees, also expressed "disappointment" at the financial performance, but said he was confident of success going forward. "We all have to sharpen our act even more and continue to focus on lowering our costs and providing on-time, courteous and hassle-free service that is essential for IndiGo to keep winning," Bhatia said.

IndiGo's parent InterGlobe Aviation reported a loss of Rs 652.1 crore in the three months ended September as higher costs and intense competition took a toll.

The second quarter is typically the weakest period of the year as demand slows down due to school openings and monsoon season, he told the employees, adding, "but this year has been unusually difficult.

"Besides seasonal factors, the Indian aviation industry is facing significant economic pressures from two elements which are beyond our control - fuel prices that have increased by more than 40 per cent year-on-year and depreciation of the rupee. Combined, these two factors increased our operating cost for the quarter by Rs 1,346 crore," he informed the employees.

While IndiGo has tried to increase its fares to offset this cost increase, the Indian aviation market remains intensely competitive, so much so that the airline has seen its average fares actually decrease in the quarter, he said.

"Despite these economic headwinds, I want to assure you that IndiGo is very well positioned to continue our ascent. With the lowest operating cost in the industry and a strong balance sheet, the Board and I are very confident that we have the right long term plan for success," Bhatia said.

Watch this Zee Business video

"In summary, we are disappointed with our financial performance during the quarter and our financial results need to improve going forward. But that being said, I am confident that we are on the right course to make IndiGo even greater," Bhatia said in the communication.