InterGlobe Aviation Limited analyst Q&A

Thank you. We will now begin the question-and-answer session. The first question is from the line of Binay Singh from Morgan Stanley. Please go ahead.

Just a follow-up question from the opening comments. When we look at CASK ex-fuel ex-forex, it’s up around 23%, and we basically said there are 2 reasons for it. One is aircraft grounding. The second is inflation in different line categories. Could you give us a little bit of a breakup between the 2 so that we can get a better sense on what normalized CASK ex -fuel ex-forex is? Linked to that, when we talk about inflation in categories, there is a lot of news flow on airport charges rising up, and you also talked about VAT rising up. Do you think that inflation that you see today is already built into the Q2 CASK? Or is there more to go through that? And the third point is I couldn’t catch what you said on 40 aircraft in FY’26. Is that your estimate that 40 aircraft will be grounded on average in FY’26, if I got you correctly on that.

So, Binay, on the first question, if you look at CASK ex-fuel, ex-forex, yes, it’s gone up by 23%. The broad categories of that driving that increase is one is the AOG related cost that is sitting in the cost side. An offset of that is in the revenue bec ause that’s where we get the claims from the OEMs. So, there is an offset of that sitting in the other operating income line. So, that’s one element of the cost increase that you will see. The other element of the cost increase that we have called out is the mitigation measures that we have taken, which again, has driven the cost higher for us. So that’s the second category of the cost increases. The third category of the cost increases relates to all the inflation that we have been talking about across the various line items. So, these are the 3 broad categories that has driven the cost, barring the fact that, obviously, you have the operational i ncreases. So, given our capacity has grown by close to 8%, there is a cost increase related to that operational growth. Alongside that, there are other factors which are AOG, mitigation and then the inflationary environment that we have seen across line items that have contributed to this 23% growth.

And the 40 number that you said on AOG, that is what you are expecting starting FY’26 or that is for the whole year?

No, so, like, we have been communicating, our AOG number has been in the mid -70s, and also the fact that there are mitigation costs related to these AOGs that we have taken. Now what we are experiencing is that the mid-70 number has started to trend downwards. We have managed to reduce this. It’s trending now below the 70s, it’s in the high 60s. And what we are expecting now working with OEMs that this number will start to trend further down and be in the mid-40s by the start of the next financial year. And over a period, it will kee p trending downwards. So, the trajectory that we were experiencing, where the AOGs were increasing, has now taken a turn. And as a result, this number will continue to taper downwards. And beginning of next financial year, the number is in the mid-40s and will further come down.

When you said the AOG is offset in the operating line item, so even the mitigation factors are offset in the operating line item or you basically are not fully able to offset that? So, overall, the idea is to get that when things normalize, what will be either a CASK or a RASK tailwind at the net level basis?

So, what we get is like and I have kind of shared in the past, the combination of AOG that we have and the mitigation measures that we have taken has an offset sitting in the other operating income line, which is the OEM -related claims that we are gettin g. So, a combination of these 2 are an offset. Like in the prior calls, I have expressed, we are not completely getting an offset related to all these cost items. So, that’s about what I can share with you. There is not 1:1 kind of a correlation, but we are obviously carrying a higher cost that has been said related to these groundings, which surface in the form of mitigation measures that we have taken.

The way the airport, and obviously, it’s kind of regulated by the regulatory authorities that you have. But some of the airports will be going through a shift as far as the control periods are concerned. So, when an airport goes through a control period shift, there is usually what we have experienced is a revision in the rentals that they have. So, as and when a particular airport is going through a control period shift, we are more likely than not likely to see some kind of a revision in those rates. A large part has already been seen and like you rightly pointed out, the airport rentals have gone up. But as and when the other airports also kind of have their control periods coming up, we are likely to see some kind of a revision over there, too.

Next question is from the line of Amyn Pirani from JPMorgan. Please go ahead.

My first question is actually on demand growth itself. So, like you rightly pointed out, your load factor in 2Q FY’25 is similar to last year of around 83% despite the fact that you had an increase in AOGs, and your ASK growth has also moderated. So, bas ically, it looks like your domestic RPK growth is around 4%. So, is this because of a moderation in growth? Or is it because some of your AOGs are in routes where you could have lost sales, and once these AOGs come back in service, the RPK growth itself could see an acceleration?

No. If we look at the growth numbers, I think in the introduction, we have also mentioned it, there is a bit of a normalization. Last year, of course, was characterized by very high growth numbers. And this year, we see some normalization on a quarterly basis of these growth numbers, especially in the somewhat traditionally weaker seasons. And obviously, Q2 is a somewhat weaker season. I think what’s important for us is that despite this very high number of AOGs and we have taken all these mitigation measures, that has enabled us to still have a significant capacity growth and with that to keep serving the market. So, without the AOGs obviously, our financial situation would have been better, but we would not have been able to serve the market and accommodate the growth. So, for us, the sort of long-term view on how the Indian market is growing is unchanged. But clearly, there is somewhat traditionally weaker season, the growth was somewhat moderated. I think also there were a couple of very specific elements in this quarter, which was the sort of the post-election travels, which were there. There were some specific weather elements also affecting it. So, there were a couple of specific items. But overa ll, I would say it was pretty much in line with our expectations, and that’s exactly why we put out the capacity projection for the entire year of the early double digits, and we had a single-digit growth predicted and actually executed in the 2nd Quarter. So, the fact that we have a stable load factor in this quarter is very much in line with what we anticipated. And in fact, where we were foreseeing prior to the quarter itself.

Just a follow -up on the costs. Now obviously, AOG mitigating factors will moderate as these planes come back and the damp leases are given back, but the inflation is something which would be impacting you as well as the industry. So, would it be fair to say that if you have to go back to normalized spreads, then the yields in the industry and your yield have to go up materially higher from here? Or do you think that the ASK growth itself can take care of the inflation that we are seeing in the non-AOG path?

Obviously, there is inflation that is two-folds. One is the domestic inflation, one is the international related inflation because part of our cost structure is also linked to the international. So, as there is moderation in those inflation levels, the u nderlying contract will also automatically start moderating downwards because those are all linked to indexes, which are global in nature. So, those moderations of inflation at a global level will obviously start flowing through as far as our moderation and inflation levels. Similarly, from a domestic standpoint, we have talked about the airport rental related inflation. But there is also inflation inherently within the country, which also is directly correlated to the expenses that we incur, meaning our crews are also staying in various hotels that are there. There is an inflation linked to hotels. So, all that is linked to external elements, environments, as they start to moderate downwards, so will we also kind of benefit from that moderation. So, that’s how I will probably answer this. But to your other point, yes, we are still growing on the revenue side. We are committed to deploying more capacity. We have grown 8% this quarter. We are again looking at early double digits. And the total year, like Pieter mentioned, is still commitment of early double-digit capacity growth, which is also in a way to absorb some of the inflationary pressures that we are experiencing. So, there is a combination effect that is playing out. And we are hopeful that some of the inflation will start moderating downwards also, which will then kind of play itself out. Having said that, obviously, the yields are going to get tested out any which ways in order for us to absorb some of these costs. Which is going to be a balance of, again, load factors and yields. We usually look at PRASK as a measure. We don’t individually look at yield and standalone yield and standalone load factors.

Next question is from the line of Arvind Sharma from Citi. Please go ahead.

First question would be on the yield trends or the passenger unit revenue (PRASK) trends, which you said there could be a bit of moderation in third quarter. Any specific reason for that because the market share is fairly strong. So, is it a manifestatio n of some decline in demand? Or what could be the reasons for that? That would be the first question.

Arvind, if you see the way the first half trended, obviously, there was a bit of a moderation in the demand. And again, as was stated, we have seen a significant kind of a run-up last year. Because last year turned out to be a very strong reference point because we had significant demand coming through, a lot of capacity got added. And as a result, it turned out to be a very strong year. So, that’s where the kind of a new baseline got established from a revenue and a PRASK standpoint. The first half played out well because at least the PRASK was holding in majority of the places. It held to the level that was there prior. And there was demand -related pressures that did surface in the first half because you had the election in the first quarter. You had some weather -related that Pieter just alluded to, you had some kind of disruptions related to systems and infrastructures also. And you’ve got some congestion related challenges also. So, those have impacted the demand. What we are now experiencing, at least in October, the demand has started to kind of creep up. It is obviously a festival-related kind of a demand creep-up that we have already started to see. But that’s what we can see at least trending in October. And li kewise, what we have guided to, that the PRASK is going to be a little moderation that we expect in Q3 because there is capacity addition that has happened. The good part is demand has started to come back. At least what we are seeing in October is going to be at least high single-digit to early double-digits on the domestic side I am talking about. While the international demand is very much there, there is increased competition that we are seeing it because India is becoming very attractive for many. So, there is a capacity build that we are experiencing on the international side, which sees a bit of a moderation, again, on the yield side. But on a whole, passenger unit revenue (PRASK) wise, we have said that between probably early single-digit to mid -single digit moderation is likely for the third quarter vis -a-vis the last year because last year was again a very strong kind of a performance, Q3 was a very strong performance for us, if you will see in terms of both demand as well as the yield levels and the PRASK levels, load factor levels that was reached.

Staying on revenue, there was a sharp increase in the ancillary income, again, quarter -on-quarter basis because this is ideally a relatively weaker quarter. Any specific reason for that?

I think within the ancillaries, obviously, various categories that we have and various initiatives that we keep carrying out, large part is obviously related to cancellations, to seat, to baggages. But a large part is also embedded in that is the cargo side of the business. And our cargo business has started to do very well for us. So, as a result, that’s where you will probably see a bit of an increase on the ancillary when you club it together. Our cargo business, our freighter business has h ad a good run at least in the more recent months, which has contributed to a better performance on the ancillaries.

One very quick view on the inflationary part. Due to that higher damp and wet leases, probably those are the mitigation measures you are talking about. Inflation would be even higher than what it would have been, if you had all the planes. So, once the AOGs go down next year, i.e., FY’26, I mean, I don’t know if we call it a reversal of inflation, but easing of inflationary pressures, like, say, second half of next year?

Too forward an outlook to say, let’s see where that goes. But like I am saying, our underlying contracts are linked to obviously, the right kind of indices, which are linked to inflation, so environment-related inflation that is there. So, it could be la bor related, it could be various commodity related. So, all are considered and factored in. If you foresee those to be moderating, yes, they will moderate downwards, but it’s a little too further out for us to kind of call out right now.

Next question is from the line of Krupashankar NJ from Avendus Spark. Please go ahead.

My first question was on the international side. While we do see that load factors have come off seasonally because we are expanding. But Gaurav, you did mention that the competition in the international side is increasing. Is it likely because 85% what we reported in the first quarter was one of the highest load factors we have recorded internationally in the past. So, is it likely that the load factor probably has peaked out and from hereon because we are on an expansionary trend, it will moderate at close to about 82% to 84%, roughly. Is that a fair assumption?

Well, I think that would be a bit too quick jumping into conclusions basis on what’s happening in the quarter. I think what we have seen taking a step back is that the international demand is strong and actually still stronger or even stronger, I should rather say, than the domestic demand. We are exploring new markets, new destinations. I think for example, Jaffna is a great example of a new market. All our growth in Central Asia. So, we keep growing these international markets. And with some of the new announcements, again, we will start to explore new international markets. So, I would not link it to a specific load factor in a specific quarter to take any view on that. The Indian traveller, as we can see, is still very keen to travel international. We see a couple of international markets where visa restrictions are being either lifted or eased, an enormous surge of demand. We expect that to continue. We will reach our 3 0% share of international ASKs very soon. We continue to add new destinations and open up new markets in that. So, we remain very optimistic and bullish on that. Yes, we do see some sort of quarter -over-quarter changes in the load factor and some sort of increase of some of the international carriers coming also on these routes again. India has been viewed, I think, over the past 12 to 24 months as the world’s fast est-growing market, and obviously, other airlines or other airlines from other countries are looking to reallocate some of their capacities to this market. I think this will only further let the market grow and develop the Indian international market.

My second question was on the ATF prices. While we have seen a sharper decline coming in, in the third quarter, at least October numbers are giving quite a sharp decline, sequentially. Gaurav, do you see probably that adjusted for even the VAT and other OMC related costs, are you seeing a decline in fuel cost? Or are there any other inflationary pressures, which is keeping the cost at similar levels?

No. On the fuel side, the way it works is obviously, its linked to last month’s MOPAG pricing. So, it’s kind of a defined formula. So, if the price is moderate, the moderation then gets factored in, in the next month’s pricing from the oil marketing comp anies. But because of some of the challenges that the airlines are running into with the congestion, there is a bit of a larger kind of fuel burn that we are experiencing because our block hours are getting more expanded out. So, that’s a bit of inefficiency that we have, which, obviously, as things ease out because there is obviously efforts that are being taken by everyone in order to reduce or improve the congestions, will also kind of then ease out the pressure that we have on the fuel side. I have also talked about the fact that, yes, there are certain states where the VATs have increased, that’s also gone up, which then becomes incremental costs for the airline. And we’re working with the oil marketing companies also because while the underl ying MOPAG may be changing, there are certain oil marketing company-related charges that have also started to go a little upwards. So, the formula to calculate the underlying fuel remains well established. So, whichever way the fuel is going to move, that’s going to be passed on to the airlines through the oil marketing companies as a defined process. So, if you are experiencing that October, the fuel has gone down, we will get to see that in November, barring some of the other elements that I am talking about, which are offsetting those declines. And hopefully, we are just hopeful, let’s see where that goes. If the congestion situation improves our operational efficiency improves, and that’s going to come through on the fuel side.

Next question is from the line of Prateek Kumar from Jefferies, India. Please go ahead.

My question is regarding your revamp on website and your app. So, how have you seen like the hotel bookings. We see that you have started hotel booking. So, how has been the ramp -up there on the platform? And what is the revenue model here as the busines s is probably powered by external platform. This is the first question. And other related question is how much of your site bookings as a percentage are like sort of happening direct on your platform? And is it something where you also see a significant business for yourselves in terms of going forward. And we see that pricing at your direct booking is like at least 2% to 5% lower versus what we see in another platforms. So, how do you see this business going forward?

Well, let me take a different angle in responding to your question, and thanks for bringing that forward. I think the first angle was that we needed to upgrade our existing architecture and IT infrastructure. And you have seen that we have gone through t he cloud, and we actually spend a lot of efforts and work with all the teams over the past 24 months to make sure that we are future proof. And for a whole host of reasons, this was all stopped during COVID, and we revitalized on that. So, we have created actually the architecture and infrastructure, which is future proof. That’s probably outside the view of everyone, but it’s been a very important part and comparing us to some other companies in the world, I think we have done it very quick and very efficient. So, we have moved to the cloud, and that’s the infrastructure. The second part was all around revamping our web and also app. You see now that we have, for example, a fare calendar on our website. And that’s really being received by our customers very positively. What is the key driver of that actually is to make sure that we have more direct customer contact and direct customer interfacing with our customers. We serve over 100 million customers per year. And actually, we would be able to serve them through our digital channels in an even better way today than we have been doing going forward. So, that’s the strategy behind it. So, when it comes to the numbers, the number of direct bookings on our own web and app was relatively limited compared to some other parts of the world. That’s clearly a strategy. Today, we are in the high teens when it comes to some of these direct channe ls. That’s a number which is still likely to go up going forward. And again, with more of the initiatives that number will go up. We do that both, on sell side. So, we are selling through our web. We are selling through app, but importantly, also the servicing, so our 6Eskai which we have introduced to serve our customers in a digital fashion is also up. The last part of that, and that’s still in the very early stages is to offer some of the hotel bookings and linked to hotel bookings. So, we have also started with that. That’s only for the past 3 months. So, it’s probably still too early to come out with exact numbers. But I am actually quite encouraged by the first inputs on that. Again, early stages, but quite encouraging. So, a journey from first, creating the architecture then putting on a lot of new features on the website and the app from the strategy to interact directly with our customers and that will create a platform where also links are being made to hotel bookings going forward. So, foundation is there. And from there, we start to build going forward. Just an additional elucidation to that. If we have 100 million customers a year, and that was the achievement of last year, and you all know that we are growing this year, so that number will be even bigger. Against that backdrop, some of the initiatives l ike a loyalty program, like this hotel sales. It’s a natural extension of the customer bases we are having. And whereas probably 5 years ago, we had just a handful of frequent flyers that with the change of India is changing rapidly. So, all the parts and the pieces of that more strategic puzzle with business products, with a loyalty program, with direct sales, with direct interaction with our customers is all matching to where we want to be and where we will be moving towards in 2030.

Some of your IndiGo Ventures fund might also be investing in these companies who might be helping powering these direct bookings or hotel bookings on the website?

Absolutely. I think whatever we would like to do is sort of extending our ecosystem and with the customer bases, again, we are whether it’s #6 or #7, I guess time will tell. But we are clearly in the top 7 airlines in the world when it comes to customer numbers. And that’s against the backdrop of aviation in India, which is still, to some extent, under penetrated. We have announced that we are going to double in size by the end of the decade. So, if you just take that 100 times 2 as an indicative number where we could end up in 2030, that’s a fantastic customer base and should enable us to do a lot of other customer interactions and customer service than flying only. Well, and against that backdrop, the IndiGo Ventures will provide us an oppor tunity in a vehicle rather to start working with start-ups with other companies to become part of that ecosystem of serving our customers.

And one other question regarding competitive intensity because you talked about the moderation. So, cost environment seems to be obviously hurting you, but it would likely be hurting your competition maybe more similarly or maybe similar basis. But despite inflationary environment, we still like sort of seeing a moderation in yield. I mean, how do we generally explain that, especially in a season which is going to be very fantastic otherwise for demand perspective?

I am not sure if you could link that cost to what’s happening on the yield side. I think what is important for IndiGo is to keep our focus on maintaining our cost leadership. We have a setting which is rather unique in terms of what is the impact of some of the global supply chain challenges and what is the impact of some of the more recent announcements, for example, on the powder metal, I think what IndiGo has done, and I would invite you to look at the situation of some other airlines in the world where the supply chain challenges have stepped in. IndiGo has been able to deal with that by a whole range of mitigating measures, where, of course, there is a cost to it, but at least that has allowed us to maintain our capacity guidance, One. Two, maintain, if not improve our market position. Three, cont inue to make use of that capacity to expand our network, open up new destinations and new routes and to make sure and that process has started now. And I cannot underline enough the importance of what Gaurav mentioned earlier. We used to be in the mid-70s, which isn’t an incredible high number. We are now in the high 60s, and we expect to start the next year in the mid -40s. Against that backdrop, I think we have done the right thing by taking at this point in time, these additional costs and all these measu res. And that means we have created, in fact, a platform to start growing on that. And then the yield, yes, the yields will show variations season over season and how the cost of our competitors look, I leave that to you, it’s not our focus. We are committed to continue our cost leadership. All the initiatives we have in place are exactly to keep doing that. And with the AOGs going down and the associated cost of mitigation going down, we will see that cost leadership continues to be there.

The next question is from the line of Achal Kumar from HSBC. Please go ahead.

First of all, coming back to revenue side. So, basically, you have guided to a yield moderation. I just want to understand, apart from this yield moderation, you will have some dilution from the loyalty program. So, what kind of dilution you’re expecting 1%, 2%, 3% and would that impact your yields more than what you’re expecting? And of course, in terms of pricing strategy, do you think any difference in terms of pricing strategy because of the loyalty program?

There is not going to be any material impact from a loyalty standpoint on the revenue on the yield because we are just launching that program right now, and it’s more of a deferment of revenue that will play out on loyalty. So, on the contrary, it will support us at a later point as the burn starts kicking in and when the burn starts kicking in, it’s going to start probably pushing up the revenue side. So, there is no material impact on the yields because of loyalty.

Sorry, let me add, Achal, sorry to interrupt you. Why are we introducing this loyalty program? We are introducing this loyalty program in order to make sure that we start to build on a loyal bases of customers. And that, in fact, IndiGo is becoming even more than today their airline of choice, both domestic and international. So, with the international growth going up and with the initiatives which we have launched in the premium segment with the introducing of the business class with the XLR, which will start to come in by the end of next year and even further in the future with the 350, we are in fact, creating that loyal customer base and the loyal customer base over time, for sure, will help us to not only maintain yields, but even improve yields. And if you, again, there look what’s happening at some other parts of the world, we see exactly that’s happening. So, of course, the entire system is based on points and recognition of points and then you move forward. But over time, and that’s exactly why many of the most successful airlines in the world are having a very successful loyalty program is precisely for that reason. And then we also tie it to the previous remark on ancillaries, our investments in the web and whatever we do with hotels and all k ind of associated bookings. This is in order to get a larger share of the wallet, if I may call it like that, from our customer spending.

No, exactly. I agree with your point, but just want to understand the kind of a dilution in terms of percentage, which will happen because of the loyalty program?

I don’t think there is any percentage to be linked to that.

My second question is around the pricing strategy. So, I just noticed that there is a significant difference, especially now in terms of pricing for the peak hour flights and on the non -peak hour flight, and especially I am talking about IndiGo in terms of IndiGo website. So, is there a change in the pricing strategy? Is it like you have more corporate customers in the peak hours and that will offset to your lower fares on the nonpeak hours. So, I just want to understand a bit on the pricing strategy and how would you offset lower ticket prices in the nonpeak hours?

No, I think there is no change of pricing strategy in itself as we have a very consistent pricing strategy and there is always a correlation between pricing and demand, and we do our revenue management accordingly, which, again, is a very normal industry element. By the way, not only the airline industry, there is the very same thing happens in the hospitality and hotels. So, we have no change in that. What we do have is actually a very significant number of routes and a very significant number of city pairs. So, you will see that where some of the dynamics in pricing are sort of very much throughout the year, and Diwali, I think, is a good example. But there is other seasonalities or other events, which differ very much on regional basis or even domestic and international basis, and some of the traffic to the Gulf is not always the same in terms of seasonality. So, probably you see a bit more variation of that seasonality as our network continues to grow and as our number of routes continues to grow, but the strategy is the very same. And yes, with 20 flights a day between Delhi and Mumbai, you see some different fare levels on the different timings of the day. Again, that’s a total normal industry practice and standard. And if you check the prices on our website, which is always good t o do, and you will find very competitive prices on our website, you will see even against the backdrop of the Indian market, which is very late booking that even there, you will find a lot of variations in the last couple of days prior to departure.

Next question is from the line of Pramod Kumar from UBS Group. Please go ahead.

First accounting question on the tax rate expectations, what do you have for FY’26 and FY’27, Gaurav?

Pramod, we still have close to Rs. 13,000 crore of carry -forward losses. So, as a result, we have enough for us to kind of offset any kind of profit. So, there is no tax-related provision that will be needed. Barring a very small amount that we are already doing in the current quarter because that’s related to finance income and the finance income cannot be offset. So, what you will see in our Reg 33, there is a certain amount of tax provision that we have to make for finance income. But on the business income side, we still have close to Rs. 13,000 crores to offset.

Given that you highlighted hotel charges have got expensive, and there are some other cost elements, which are also kind of going out of control. So, is there a thought to use the balance sheet what you have to kind of probably look at investing in hotel infrastructure or something like that, because that’s a fixed, permanent cost for you, given the business model, right? So, is it some kind of a thought that you can look at investing or creating accommodation spaces which are not exactly very fancy like a 5-Star and end up paying the same rate. And something which can reduce your costs over a longer term for what do you spend on accommodating your crew? And also on the airport charges side, is there a discussion with the government because ultimately, any airport charge is borne by the customer, right? And in a few cases, even the airlines will have to bear some of the cost. But is there a discussion with the government that some of these airports which are increasingly turning out to be like more like fancy lounges and very expensive looking airports, is there a discussion with this on the government that is there a way they can probably relook at the entire way these airports are done and the kind of CAPEX approval, which are given because the return is linked to the CAPEX what you do to an extent, right, for the airport operators and the guys who make the airports, because ultimately the cost is being bo rne by the consumer. So, any thoughts on that, please?

On the latter, we have got a regulator that regulates the costs. So, obviously, we keep talking to the regulator, we keep talking to the airports also. It’s in our collective best interest that we have more footfall and we have more passengers because th at’s where it will bode well both for the airlines as well as for the airports. Having said that, some of the investments that are being made in the airports are also long term in nature because you need to kind of project out what kind of a footfall and the fact that you’ve seen India from a hub standpoint. So, those are investments that are being done. So, there is always going to be a discussion related to how you can balance it well because the initial investments will look a little more on the higher side. But when you have a long-term view, again, I see to the point that they probably have a long -term view around how they can develop their respective infrastructure, which can be of international standards also and as a result, attract more footfalls through of hub creation. As far as the other, we will take it as a cost idea. What usually happens is when your operations become significantly large, there is always a discussion related to in-source versus outsource kind of model. So, what you’re suggesting is an in -source model . But that’s not always practical because our core business is largely to be focused on ensuring that we provide the best of services to our customer from an aviation standpoint. So, that’s where our focus is. We will always take measures to reduce the cost wherever possible. But all ideas are welcome. So, having said that, there is always an evaluation that is being done, but the extent of ideas always get kind of deliberated upon from a lens of in-source versus outsource and keeping your core kind of activities closer to yourself and try to do a lot more than what is needed.

Ladies and gentlemen, that would be our last question for today. I will now hand the conference over to Mr. Pieter Elbers for closing comments.

Ladies and gentlemen, thank you so much for joining us in this call. In summary, our top line grew by 14.6% on a year -over-year basis. Our 2nd Quarter Results were impacted by seasonal factors and the temporary headwinds related to the peak groundings du ring this quarter. With respect to the groundings, we have turned the corner, and number of grounded aircraft have started reducing. Ladies and gentlemen, thank you for joining. Looking forward to talking to you next quarter and for now Shubh Deepawali to you and to your family members. Thank you.

Thank you very much. Ladies and gentlemen, on behalf of IndiGo, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

This transcript has been edited for readability and is not a verbatim record of the call