Evening, ladies and gentlemen, welcome to IndiGo's conference call to discuss their first quarter fiscal year 2022 financial results. My name is Janice, and I will be your coordinator. At this time, the participants are in listen-only mode. A question and answer session will follow today's management discussion. As a reminder, today's conference call is being recorded. I would now like to turn the conference over to the moderator, Mr. Ankur Goel, Head of Investor Relations for IndiGo. Thank you. Over to you, sir. Good evening, everyone, and thank you for joining us for the first quarter fiscal year 2022 earnings call. We have with us our Chief Executive Officer, Ronojoy Dutta, and our Chief Financial Officer, Jiten Chopra, to take you through our performance for the quarter. Wolfgang Prock-Schauer, our Chief Operating Officer, and Sanjay Kumar, our Chief Strategy and Revenue Officer, are also with us and are available for the Q&A session. Before we begin, please note that today's discussion may contain certain statements on our business or financials, which may be construed as forward-looking. Our actual results may be materially different from these forward-looking statements. The information provided on this call is as of today's date, and we undertake no obligation to update the information subsequently. A transcript of today's call will also be archived on our website. We will upload the transcript of today's prepared remarks shortly. The transcript of the Q&A session will be uploaded subsequently. With this, let me hand over the call to Ronojoy Dutta. Thank you, Ankur. Good evening, everyone, and thank you for joining the call. Hope all of you are safe and doing well. We announced our first quarter fiscal 2022 financial results today. We reported a net loss of INR 31.7 billion for the quarter ending June, as compared to a net loss of INR 11.5 billion for March quarter of fiscal 2021, and INR 28.4 billion for the June quarter last year. Needless to say, we are deeply disappointed by these results. Last year for the June quarter, we had reported a net loss of INR 28.4 billion, and this year we have a loss of INR 31.7 billion. Let me first explain the reason for the higher loss. INR 2.9 billion was due to the foreign exchange losses, and INR 1.5 billion pertains to lower finance income. Without these two non-operational items, our losses would have been roughly the same. The next question, of course, is that given we had around INR 9.1 billion higher ASKs, why could we not generate more positive contribution from this additional flying year-over-year? Fuel, unfortunately, was a big negative driver, and our year-over-year fuel costs adjusted for overall capacity impacted us by INR 5.4 billion. You will, of course, be aware that year-over-year fuel price has doubled. The second large factor was the severe impact that the COVID-19 second wave had on our revenues in this quarter. The best way to illustrate this COVID-19 impact is by reading out to you a monthly revenue performance for the period April through July. April revenue was INR 15.4 billion. May was INR 6.7 billion, and June was INR 9.6 billion, and July is projected to recover back to April levels. Sequentially, our CASK for the June quarter increased by 43.7% compared to the March quarter on account of higher fuel price, rupee depreciation, and 41.5% lower capacity deployment. Our cash burn also increased from an average of INR 190 million per day in the March quarter to an average of INR 334 million per day in the June quarter because of lower demand and lower capacity deployment. Unfortunately, with the second wave, we faced similar challenges as we did last year and had no option but to reinstate leave without pay for our employees. On the cash side, we continue to look at ways to bolster our balance sheets through various sources of funds and have also obtained shareholder approval to raise up to INR 30 billion of QIP. We ended the quarter with a free cash of INR 56.2 billion. In the near term, our primary focus remains on adding capacity so that we can get back to pre-COVID levels as quickly as possible. Currently, we are restricted to 65% capacity deployment, but we are in continuous dialogue with the ministry, and we are hopeful that we will see a gradual relaxation of these restrictions. Of course, the additional capacity will have to be tempered by the reality of COVID-impacted demand so that we are always covering our variable costs and generating cash to cover the fixed costs. Scheduled international operations remain challenging, and our short-term focus is on increasing the capacity deployed through air bubble arrangements and charters. As we have reiterated throughout the pandemic, our focus is to manage the cash levels, improve our cost structure, run a high-quality airline with highly engaged employees, and position ourselves for the future. The core to our business remains our customer service. Some of the key accomplishments during the quarter are, number one, globally, IndiGo was ranked as the third most punctual airline by OAG ranking for January through June. Domestically, we have been ranked as number one in OTP consistently for the past four quarters. Our customer complaint rates in the June quarter were the lowest, at 0.1 complaints per thousand passengers, as compared to the rest of the industry average of 1.09 per thousand passengers. We have been felicitated as India's best place to work in transportation by Great Place to Work Institute. While the impact of the COVID second wave has been severe on both our income statement and our cash flow, we are pleased to see that as COVID numbers decline, traveler revenue also rebounds quickly. This has obviously been a very bad quarter, and the key question in investors' mind must be: when do we start seeing light at the end of the tunnel? Given the vaccination rates, a reasonable scenario is that the third wave will be relatively flat, and as such, we hope to be at 100% of peak COVID domestic capacity by the end of the year. After which, we can hope to return to normalcy on revenue. With that, let me hand over the call to our CFO, Jitendra Chopra. Thank you, Ronojoy, and good evening to everyone. Hope all of you are safe and doing well. For the quarter ended June 2021, we reported a net loss of INR 31.7 billion, compared to a net loss of INR 11.5 billion for the quarter ending March 2021. We reported a negative EBITDA of INR 13.6 billion, compared to an EBITDA of INR 6.5 billion in the quarter ending March 2021. In the March quarter, we operated at 75% of peak COVID capacity, but during the June quarter, we operated at only 44% of peak COVID capacity. Such lower capacity deployment has negatively impacted our performance matrices. Some of the key variations from March quarter are we operated at a load factor of 58.7%, a reduction of 11.4 points. Our RASK reduced by 16.4%, primarily driven by a reduction in our load factors by 11.4 points, and reduction in our yields by 5.7% to INR 3.48. Our fuel cost increased by 8.5%, compared to a 12% increase in average ATF prices on a sequential basis. Our CASK ex-fuel increased by 56%. The update on our cash position is as follows. We ended the March quarter with a free cash of INR 71 billion. On average, net cash burn during the quarter was INR 334 million per day. At the end of March quarter, we had announced liquidity initiatives aggregating INR 45 billion. In the June quarter, we were able to secure additional liquidity of INR 10 billion, taking the total initiative to INR 55 billion for the year. Of this, we infused INR 14 billion during the quarter. We are also in discussion with various lenders to further enhance our liquidity position. We continue to work with our various partners to secure favorable credit line terms. We ended the June quarter with a free cash of INR 56.2 billion and a total cash of INR 170.7 billion. On other key balance sheet numbers, we ended the quarter with a capitalized operating lease liability of INR 259.3 billion and total debt, including the capitalized operating lease liability of INR 316.9 billion. The strength of our balance sheet is our biggest defense in the fight against COVID-19, and we will continue to enhance this strength by focusing on cost reduction, liquidity enhancement and capacity addition. With this, let me hand it back to Ankur. Thank you, Ronojoy and Jiten. To answer as many questions as possible, I would like to request that each participant limit themselves to one question and one brief follow-up if needed. With that, we're ready for the Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. An operator will take your name and announce your turn in the queue. Participants are requested to only use handset while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Amit Shah from BNP Paribas. Please go ahead. It was the reason for the loss was INR 2.9 billion due to FX, and the other INR 1.5 billion was because of? Lower interest income. Okay. Also for July, what is the revenue trending at? I missed that number. Like we said, we gave you the April number, and then we said July looks like it will be similar to April. Okay. Okay, that's it. Thank you so much. Thank you. Sure. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi, team. Thanks for the opportunity. Actually, I had two questions. Firstly, on the quarter, we've seen increase in staff costs. Could you talk a little bit about that on a sequential basis? Along with that, we've also seen ancillary revenues as a percentage of revenues go up. Any sort of a one-off or anything on that? Secondly, any outlook on the second quarter? Typically, we see that Q2 is the weakest quarter in every financial year. This time as things are opening up, crude prices are high. Are airlines able to pass on the crude pressures or these are actually trending down? If you could comment on that. Thanks. Yeah. Regarding the seasonality, we think COVID has sort of trumped seasonality by a big factor. Really it depends on how COVID is performing. As you know, COVID, the numbers are coming down. They have stalled at about 40,000 cases a day. We hope they continue to drop. Really, we think that seasonality will be a factor once we get back to normal, but not for now. Now, to the other question of staff costs. Part of that has to do with mostly driven by pilot costs, what we're doing with pilot training, where we're holding people. As you know, we had a lot of people coming in from other airlines, and they were in training for a long time. Now they're coming out of training, and there's a little bit of cost increase because of that. Those were your two questions, I think, seasonality and staff costs. Also on the ancillary revenue. If I look at the ancillary revenue for the quarter, it's only 26% below your best ancillary run rate. What is happening there? Ancillary is actually doing well in terms of cargo. When you're comparing it to which quarter are you saying 26% less? If you could just share the cargo number within that, how much will be cargo now for you versus same quarter last year? Something like that. Actually, Binay, number is actually not less if you look at the capacity. I'm sure you're looking at sequentially, right? If you look at sequentially, our cargo numbers has stand pretty much the same as last quarter. In fact, some of our ancillary revenues like cancellation, et cetera, have been steady for the quarter. If you look at from a capacity perspective, though where capacity has fallen from last quarter, but we still holding on good on the ancillary revenue because of cargo and these other initiatives. Okay, thanks. I'll come back in the queue. Thank you. The next question is from the line of Varun Ginodia from Ambit Capital. Please go ahead. Hello. Yes. Good evening, everyone. Thank you for giving an opportunity. I have two questions. One is on the yield side. Passenger yields, they fell sequentially despite fare bands in place and Government also increasing the lower end of the fare bands in the month of June. If you can throw some color there, what were the drivers behind lower passenger yields? The second question is on the lease rental side. That number looks to be much higher compared to the activity that we did in 1Q FY 2022. If you see 2Q FY 2021 was a year where we posted similar revenue, but the lease rentals were much lower. Plus, we also had disposals of A320ceo happening in this quarter. Why this number appears to be on the higher side? If you can just give your thoughts to these two. Yeah. First on the yield side, clearly COVID impacted the yield a lot. Really it was again, a May phenomena which really hurt us. Through February, as you know, things were looking better, things were going okay. Once COVID-2 hit, the traffic really dried up, and when traffic dried up, the yield dried up, too. As far as the lease rentals, if you're looking at comparing it to the revenue, two things have happened. We have obviously taken delivery of new aircraft, and at the same time, our returns were impacted by COVID. We had a number of redeliveries that were slated, but they fell short because many of the MROs were closed, and therefore our overall lease costs would be higher, yes. Okay. I also want to say, though, but as COVID is disappearing, we are pushing out these redeliveries at a faster rate, and by the end of the year, we hope to catch up again. Okay. Historically, I believe this number is INR 0.8, INR 0.9 per ASK. Is that a fair way to look at it on a longer term basis, or will this trend up as we take deliveries of the new aircraft? Well, if you're comparing it to revenues, we are absolutely sure when we get back to normal revenues, the lease cost will not be a factor. Right now, clearly, revenues are subdued, lease costs remain fixed, and redeliveries have slowed down. That is the issue. Once we get back to redeliveries being pushed out, which will happen, we get to more international flying, particularly, then the lease cost per revenue will be back to normal, yes. Thank you. Thank you so much. Mr. Ginodia, does that answer your question? Yes. Thank you. Thank you. Thank you so much. Yeah. Next question is from the line of Deepika Mundra from JP Morgan. Please go ahead. Hi, good evening, and thanks for taking my question. Sir, firstly on the liquidity, could you give a broad breakup of the INR 50 billion of liquidity for the year? As I mentioned in my commentary also, we are talking to our various lenders, but we don't normally give a breakdown of our liquidity. Right now our number is at INR 55 billion, which we have called out, and we keep enhancing it as we continue engaging with more lenders. Okay. Secondly, on the employee cost reductions, how much was it applicable in the June quarter or is it going to be starting from the September quarter? Also, previously you've given a guidance for employee costs for the year, so any similar guidance for FY 2022? FY 2022. No, I don't think we can do that. Right now our employee costs are down about 28%. There's no reason why that should change. It's fairly flat. At what point we will start giving pay raises, taking back all the pay cuts, all that will depend very much on the environment. Okay. Sorry, you're cutting up. We can't hear you. Can you hear me now? Yes, go ahead. Yeah. As for last quarter, before we were hit by the second wave, you were very constructive on the yield in line with the traffic recovery. Could you give some color on that front for the next few quarters, H2, and what you may have? Excuse me, are you asking what is the color on the traffic forecast? Is that what you're asking? No. fairly constructive on yield- You know, you're breaking up so badly. We can't hear you. Okay, I'll join back in the queue. Thanks. Okay, sure. Thank you very much. We take the next question from the line of Arvind Sharma from Citigroup. Please go ahead. Good evening, sir, and thanks for taking my question. Sir, first question, a more structural one. IndiGo is a market leader with almost 50%-58% market share. Despite that, and given the cost pressures from the fuel side, the yield has been rather soft. Do you think that as traffic comes, the yield would be at least relatively higher than the players? Do you think the Indian market would be commoditized for a longer time and therefore, the market leadership might not necessarily translate into better yield compared to competitors? I think the yield pressure we're seeing right now is purely driven by COVID. February, as I think we mentioned, we were quite optimistic. The yields were good. I think we'll at least recover to pre-COVID levels. It's a question of, well, after that, can we go higher? I don't see any permanent impairment of yield in any way at all. It's purely driven by COVID. Sure. Thanks, sir. Sir, just one more question on the lessor side. Given that operations have been weak, there have been restrictions on the capacity. Has there been any further negotiations with the lessors regarding the supplementary rentals or the cash rentals in terms of quantity or timelines of payment? As far as the lessors are concerned, we take a long-term view of this. There's a pipeline between OEMs to lessors to IndiGo, and we very much cherish that pipeline. We want to keep it strong and we look at long-term relationships. We've had discussions with both OEMs and lessors, and to some extent they have been flexible. We are not going to pay you things that are up and we'll pay you later. We're not in that mode at all. That's not just true for lessors. Whether it's airports or oil companies, we make sure that all our bills are current. We don't have any payables built up at all. Great, sir. That is good to know. Sir, if I could just ask a very small data question. In the new accounting norm, the lease rentals are divided into finance cost and depreciation. Could you share that number? How much is in the finance cost, how much in depreciation? No, we don't share that number. No problem, sir. Thank you so much for taking my question. Thank you. The next question is from the line of Aditya Makharia from HDFC. Please go ahead. Yes, sir. Maybe a little bit of a larger picture question. The corporate or the business travel will come back at some point of time. What are the trends you are seeing? Maybe you could talk about July or generally how you've seen it. How do you see this particular segment evolving? That's my first question. I'll ask Sanjay Kumar to answer this question. Go ahead, Sanjay. In terms of corporate business, we had seen a recovery of almost 50% until about 7th March before the second wave hit. After that, of course, there has been a downturn of the business. What we saw was certain industries like manufacturing, infrastructure, pharma, banking, all together, they kind of saw better recovery compared to some of the IT consulting and professional services industry. What we are hoping is as the COVID-19 second wave is coming down, we will be seeing the recovery in these sectors once again, which will perhaps be close to about 40%-50%. IT and consulting, these kind of industries might take a little longer than what we can expect in certain part of the industry. We'll see gradual recovery in next few quarters, I guess. Sure. How do you just see the work from home, let's say pre-COVID corporate travel was on a base of 100. Once things normalize because of things like work from home, do you see a more realistic level at maybe 70 or 80? Any thoughts you could just share? I think we've shared before, and I don't think our numbers have changed. Corporate used to be 20% of our travel, and then it shrunk to about 7%-8%. Our best guess is it will stabilize at about 13%-14%. It won't recover to 20, but it will probably hold at about 13%-14%. Okay, got you. Thanks a lot. Thank you. The next question is from the line of Ansuman Deb from ICICI Securities. Please go ahead. Hi. Thanks for the opportunity. My 1st question is regarding the debt number. If you can share the debt number, ex-finance lease and ex-capital lease obligations. We had INR 269.3 billion of capitalized operating lease and a total debt of INR 316.9 billion. INR 369 minus INR 270 would roughly be kind of normal debt. Yeah. Okay, thank you. The second question is regarding QIP. If you could tell us what is the delay in QIP? Because the way we see it, the big cash arbitrage that we had in term with our peers is now shrinking in the sense that they are in deeper debt, but we are also losing very valuable cash. QIP could be an important step in bolstering our balance sheet. I just wanted to understand the timelines and the possible reasons for the delay. Okay. I'll just make one statement on QIP, I don't think we're in a position to take further questions on this issue at this time. Here's the statement I'll make. Given the current cash position of the company, we continue to evaluate timing and size of any QIP. Okay, thank you. Thank you. The next question is from the line of Achal Kumar from HSBC. Please go ahead. Yeah, hi. Thanks for taking my question. I had two questions, if I may. First of all, you mentioned that July revenue is almost similar to April. Does that mean your profitability, if you look at the profitability at the profitability level, it's only worse than April because fuel price itself is almost 20% worse than April. Of course, all the other employee costs and all looks like slightly higher. Do you think in terms of profitability, the July looks like worse than April? That is my first question. Secondly, in terms of advance sale, how do we expect your working capital to play out in case your advance sale is not as good as it used to be? How do we look at the advance sale and working capital? Thanks. Okay. Let me talk about how revenue is shaping up. As I said, it's a very volatile environment. We get periods in which we are quite optimistic, then we go to pessimistic, then we become optimistic again, and all within a very short period of time, very compressed cycles. It's really all driven by the COVID numbers. If you want to know what's going to happen to our revenues, if you just track the COVID numbers, you'll get a very good sense of it. May was, I don't know how to say, what's the right adjective. It was distressing in terms of how quickly the revenue shrunk. That again was, remember, at the 400,000 levels of infections per day. Now we are at 38,000, 39,000 infections per day. Of course, the revenue is improving. Therefore, I don't think we should say, okay, last quarter it was this, and therefore next quarter it'll be similar. The quarter, which will be sort of June, July, August, definitely shaping up to be better in terms of the revenue numbers. Our forward bookings are picking up, but they're not as strong as they were back in February. All based on COVID. We have reasonable optimism for the quarter relative sequentially. Again, if tomorrow COVID-3 hits and the cases spike, within a week we'll change our view. It's very volatile in that sense. Why you want to fly more? You initially commented that because your oil price is high, and that's why despite flying more capacity, your losses are higher than last year. What will make you two confident that your losses will come down if you fly more despite having such a high fuel price and low yields? Yeah. We watch that number very carefully. You're right. It's very much a balancing game of how much capacity we should put into the market. We are not doing any long-term planning at all. It's almost like, okay, next week, what should we do? Our goal is to make sure that we are always covering our fixed costs. We've said before, I think that our fixed costs are in the range of 45% to 50%. As long as we can cover that, we should be willing to put capacity out in the market. That number also changes depending on the yield. If the yield is low, that 45% becomes higher. We are watching all this carefully, and we're trying to make sure that no matter what we do, we are cash positive and we are always contributing towards fixed costs. Okay. Thank you so much and good luck. Thank you. Thank you. The next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead. Yeah, good afternoon, everyone, and thanks for the opportunity. I have two questions. Mr. Mongia, I'm so sorry to interrupt, but we are unable to hear you well, sir. Can you hear me well now? Yes, sir. Thank you. Thanks for the opportunity. I had two questions, and both of them actually were on yield. I wanted to get a sense if you give a sense of the revenue number on a monthly basis. It will help if you could give us a similar kind of number for yields on a monthly basis, because as you pointed out, one should kind of take out May out of the equation. I'm not sure that'll be particularly helpful to you, frankly. We're giving you the overall revenue number, that's what's important. That's a combination of load factor and yield. Now if I tell you a yield number, you'll say, what's the load factor? What's the capacity? How much are you flying? You ask few more questions, whereas the real important issue is how much revenue are you generating? However, we get there. We can get to revenue through capacity. We can get to revenue through yields. We can get to revenue on load factors. The final product is how much revenue? Normally we don't share monthly data, but we thought this year in particular, it was important to share that, which is why we've given you the revenue number. Got that, Ronojoy. The second question that I had was, the context is the declining share of business travel or corporate travel as you think it would happen over time versus pre-COVID. The question I wanted to ask is that, does that have any impact or should it have an impact on the overall yields that the company would be able to earn because certain passengers who would book closer to the date of travel would be lesser in number? If so, are there means and ways of probably managing the situations where yields are not impacted? This is a mixed bag. All our bookings are closer in now. Before, we used to have 60-day booking, 30-day booking, part of the challenge during this May decline was, hey, the bookings are happening in the last five days. Some of those bookings were happening at quite high yield. There was a big spread between corporate travel and retail travel, if you will, before, because part of it was also age of booking. Now that everything is compressed, the yield difference between business and retail has also been compressed. That's the good neos. Also, as we've said, travel in India is among the lowest yielding in the world. There's not much room for yields to go any lower. They can only inch up slowly. Then we're talking of India growth story and the middle income. I'll have to say in a very emphatic way that, yes, COVID is a big crisis, no question, but it is a short-term crisis, and we don't want to lose sight of the longer-term picture. Otherwise, we sort of lose the script. The longer-term picture is the India story remains strong. Look around, look at other industries. The India story is very much there. The middle income growth story is very much there. While, yes, oh my God, what happens next quarter and the quarter after that is all very important. When we look at the long term, we are saying, Listen, let's just keep the cash level managed. Let's run a really good airline. Let's really focus on the quality, and then let's make sure our fleet is efficient, that we get rid of the fuel inefficient planes, that we've got the right size of the fleet and focus on the longer term. The longer-term picture, I have to tell you, is a table-thumping great story, and we're not losing sight of that. Got that, Ronojoy. Those were my questions. Thanks for your answers. Thank you. Thank you. The next question is from the line of Chintan Sheth from Sameeksha Capital. Please go ahead. Thank you. Thank you for the opportunity. One question is on the capacity side. If you can highlight what can we expect for the coming quarter and this year, given we are not outlining the guidance in the press releases, but if you can give some color over the looking at it that way, if you can. Broadly speaking, we are at 65% of pre-COVID-19 capacity. That's dictated by the ministry. That's where we are today. We have solicited a higher level of capacity, as have a couple of other airlines. Just because the capacity is there, we're not going to fly. It's not like the government says, Okay, you can go to 100%, does it we go to 100%. Of course not. We will be dictated by, again, the break-even load factors that we see in the market. The break-even load factors will be very much driven by the yield, which again, will be very much driven by COVID-19. We'd like the government to do away with these caps because we don't think they make sense. It's up to us to decide how much to fly. Once those caps are removed or even relaxed, we will fly judiciously. We're not here to lose money, and therefore, we'll put in capacity slowly and in a measured way so as to make sure we are always above break-even load factors. Sure. On the expenses side, the trend rate we should look at on the employees and the rentals should be similar to these numbers, at least on the fixed side? For which period you're talking about? For the upcoming quarter. For the upcoming quarter. Lease costs? Roughly the same, I would say. We get some new airplanes in, we put some old airplanes out. The lease cost should remain roughly the same. Yes. Sure. Lastly, the timeline of retiring all the A320ceos will be December 2022, right? Wolfgang Prock-Schauer will take that question. When it is operational. No. CEOs, when will they get returned? A320ceos will be all returned in about two years. All A320ceos will be out and replaced by new ones. That's our plan. There might be some used less, but not very many, I have to say. You also see that the lease returns after COVID-19 crisis was there until end of last quarter. We see the whole situation stabilizing and we also start exactly again. It will be good that, as Ronojoy has mentioned, it will be a catch-up situation on the lease returns. This will also help us to bring our lease costs stabilized. Again, while we have been slower than planned, we've still been returning A320ceos at quite a good pace. As we do that, both our lease costs will come down and our maintenance costs come down, which is the other good thing. True. That's all from my end. Thanks and all the very best. Thank you. Yeah. Let me also clarify here, the A320ceos last by September 2022, yes, we want to have them out, right? Modernized. Thank you. The next question is from the line of Joseph George from IIFL. Please go ahead. Hello. Good afternoon. Thanks for the opportunity. Am I audible clearly? Yes, you are. Thank you. Perfect. Thank you, Ronojoy. I have two questions. The first part of the question was in relation to the capacity guidance. In your opening comments, you mentioned that by 4Q, your capacity would hit the pre-COVID levels. What I wanted to understand was when you refer to pre-COVID, are you talking about pre-COVID domestic capacity or pre-COVID overall capacity? No, pre-COVID domestic. Yes. Thank you for clarifying. International, as we know, there is no vision as to when the whole thing is going to get opened up. We are talking domestic capacity. Absolutely. Sure. If your exit rate is going to be at pre-COVID, it obviously means that the whole of FY 2023, you expect to be better than pre-COVID in terms of overall capacity. Would that be a right statement to make? Absolutely. Look. We have a stable of fuel-efficient new aircraft just waiting. Okay? I just need the flag to come down that says COVID's gone and life is coming back to normal. Those airplanes will take off like a shot. I'm very anxious to keep adding capacity every chance we get. By 2023, of course. I don't think anyone will say 2023 if COVID is still around. Perfect. Thank you. The second question that I had was in relation to your balance sheet. When I look at the FY 2021 balance sheet, the net worth that you had was about INR 1.1 billion positive. With a loss of INR 32 billion in 1Q, it's quite obvious that the net worth has turned negative. In that context, I have two questions. One is, does a negative net worth impact the terms of your lease agreements, maybe existing or future with respect to the implied lease rentals because of the perceived risk of going up? Is there any such issue to be worried about? None whatsoever. As we said before, one of the relationships that we prize, and this is very solid, is this IndiGo to lessor to OEM relationship. We have placed all our contracts with the lessors go over the number of years. We don't take these aircraft close in. They're placed well in advance, and we see no softening of that market from our standpoint. Perfect. Thank you. If anything, I think in the lessor's eyes, IndiGo has become an even better risk, if you will, from that standpoint. I mean, just see what's happening around everywhere else, and they look at IndiGo, and then we just are blue chip in that sense. Our pricing will only improve, not get worse. Got it. Thank you, Ronojoy. Thank you. The next question is from the line of Ashish Shah from Centrum Broking. Please go ahead. Ashish Shah, you may please go ahead with your question. Yes, sorry. Am I audible now? Yes, you are. Thank you. Yeah. Sorry for the earlier thing. My first question is that, in terms of our lease, are these all fixed-rate leases or variable-rate leases? If tomorrow the overall borrowing rates were to go up, would our leasing costs also go up? Absolutely not. These are long-term contracts. Okay. They're not susceptible to increase. Look at it the other way. When things were tough, we didn't reduce the rates. Yeah, again, that's the relationship. We're not looking at transaction, we're looking at relationship. Right. Fair enough. Okay. Secondly, there is a lot of questions around the yield. My one point is that when the DGCA comes and says that the ministry comes and says that we are increasing the floor of the fares by an X amount, does that reflect into the yields that you get in the market? Somehow, while the ministry dictates certain terms, but in practice, in commercial terms, you do not see that yield going up in the market. I will hand that question back to Sanjay Kumar. Obviously, there is a reflection of the fare revision by the DGCA in our yields from time to time. As and when the fares have been kind of revised before, there has been some kind of impact on the overall yield. Just to kind of capture this, everything is largely dependent on the overall demand environment. As the demand environment improves, obviously it will result in better kind of load factor as well as revenue situation. Overall, it does affect to some extent, but until the demand environment improves, we will continue to see some pressure on the yield. Thank you. Got it. Sure. Thank you. Thank you for the answers. Thank you. The next question is from the line of Achal Kumar from HSBC. Please go ahead. Oh, hi. Thanks, I got the second chance. Sorry. I just want to understand about the situation with the engines. I think you ordered some of the CFM engines. What is the status? When are you going to receive it? How are you planning to finance those engines, please? How to finance the engines? Yeah. Wait, this is all part of the lease cost, the lease arrangement that we have with the lessor. We pay the engine manufacturers, but finally that whole engine and the aircraft goes to the lessor and they pay for the engine, and we pay the monthly rental cost. Mm-hmm. What is the status? Did I answer your question? I'm not sure I understood your question. Did I answer it correctly? No, that's fine. Moreover, I just want to understand what is the status. When are you going to receive those engines, and how that fits in your overall fleet? You're talking about the CFM engines, the LEAP engines coming in, is that what you're asking? Yeah, exactly. The LEAP engine deliveries had just started a couple of months ago, and right now majority of our news are naturally with the PW engines. Now the LEAP engine has started, and we expect also to get all the approvals as we have for Pratt now on ETO in the extended range operations. It's started, and so far I have to say our experience with the LEAP engine was very good. Okay? Excuse me, sir. Does that answer your question? Hello? Yes. Yes, sir. Does that answer your question? Yeah, that's fine. Sorry, last one, if I may. Now, how confident are you in terms of reaching back at the February 2021 traffic levels in the quarter to December, which you were quite confident last time, and you said that you believe that you'll reach at that level during the last quarter. Now of course, the traffic has recovered, but from here on, we are at almost 560,000 passengers. To reach 320,000, so it's just double. How confident are you? Okay. Like I said, it is a very volatile environment. Back in 8th of February, I remember how optimistic we were. We were forecasting a profit at some point very close, and we were like, Oh, so by this month, we should make money, et cetera. The bottom fell out with COVID too. In May, the numbers were so bad, it's like, Oh my God, can it go any lower than this? It was that bad. Okay. We get these periods of improvement, stall, improvement. Now, what causes this improvement and stall? It's really driven by the narrative in the marketplace. When the COVID numbers are down, we get a sudden surge. There's talk about Delta variant, a UK variant, a third wave is coming, wear double mask, and we immediately see the numbers fall again. It's very volatile. Anything I tell you have to say that behind the background is what is happening to COVID. Assuming COVID behaves and that the third wave comes but is relatively flat because of vaccination, this is our best-guess scenario with all the caveats that I put in there about COVID and the third wave and so forth. Our best-guess scenario is that by December, we should be back to about February and back to almost pre-COVID levels for domestic only. International will still be slow, but domestic we should get back to December. We've got a build-up that we're seeing, and obviously we're projecting it based on what we're seeing in July, what we're seeing in August, what the medical profession is saying about COVID. With all that, and with all the caveats and forecasting is a dangerous game in these very volatile times. With all those caveats, yes, we think by December we should be back to 100% of pre-COVID levels. Perfect. Thank you so much for taking again the question. Thanks. Thank you. Thank you. We take the next question from the line of Chintan Sheth from Sameeksha Capital. Please go ahead. Thanks for the follow-up opportunity. One question I wanted to understand on the demand coming from which segment, if you can, whatever demand we are seeing right now, metro to metro, or we are still seeing more tier 2 travelers picking up your capacity? Yeah. Let me try. What were the different waves that came through on the revenue side? Yeah. Immediately after we opened up, it was a metro to non-metro and one-way traffic. As you know, it was mostly migrant labor, all of that, and it was well advertised in the press. Places like Patna, Ranchi, saw huge spikes, but one-way spikes. That was the first wave. We saw that slowly becoming a two-way spike as people started returning to their work, but metro to metro continued to remain weak. Metro to non-metro, our capacity actually went from 47% to 65% because it was strong growth in demand. Whereas metro to metro, we reduced capacity from over 25% to 20% of capacity. However, now, with this build-up in revenue, we are seeing metro to metro also coming back, and that makes us feel better because it's more of a balanced growth. It's no longer one-way, it's two-way to non-metro and metro to metro is also coming back. That's interesting. That is all. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for closing comments. Okay. We've all been together now for four quarters. four quarters of very challenging times. We started by saying that our goal during this pandemic is to come out stronger than we went in. The question is, we should look at ourselves now and say, are we delivering on that promise? I will point to the following factors. When we say we're going to do it better at what? How do you know we are better? Let's look at the customer-facing issues first. In terms of quality of flying, we've never run a better airline, and we are as good as the best in the world. We're not just staying in India. If you look at our OTP numbers, on time, we are the third punctual in the world. If you look at our customer complaint ratios, they've gone way down, 0.1 versus 1.0 for the rest of the industry. If you look at our NPS, they're way up. Everything from the customer-facing says, Yes, IndiGo has got better. Look at our underlying structure. In our structure, the two most important things are our fleet and our employees. Our fleet is the most fuel efficient we've ever been. We are becoming more fuel efficient with time. We have this wonderful animal called the A321. We have the XLRs on order. Our fleet is quite a remarkable fleet, I would say. You can look around the world and you can ask yourself, who has a fleet like this that is this young, this fuel efficient, and this much growth built into it? Our other pillar, as I said, from fleet, is employees. Take a temperature of our employees. We've gone through very tough times together. We've taken pay cuts, we've taken layoffs, and yet the employee morale is remarkably high. People are engaged. People are enthusiastic. People love IndiGo. Our employees do. You can see that in the Great Place to Work, all this has happened only recently. I look around and say, what is happening to each division? I told each division, I want you to be the best in the industry. IT, you be the best IT in the industry. HR, you be the best HR in the industry. Even legal, be the best legal that you can be. Look what happens. We are among the top 15 in-house legal firms in Asia. Look at HR. We keep getting award after award for management of HR. All of that speaks to, yes, our employee structure is also strong. Let's look at our brand. We used to be the 53rd most valuable brand. We are now the 32nd, I think, or 33rd most valuable brand. Just know that ahead of us are mostly multinationals, is the Googles and American Express and the Nestlé. We have a hard time dislodging them. If you look at Indian brands, we're the seventh most valuable Indian brand. You look at our market position. Every major city, I'm not just talking about six metros, I'm going down. Most major cities, we have a remarkable market position. We have position in all the smaller towns and cities of the country. Places like Leh. We didn't fly there. Now we are flying there in the middle of the pandemic. Places like Aizawl, places like Bareilly. We are open stations even in the middle of the pandemic. I look at this list and I say, is IndiGo emerging stronger from the crisis than when we entered? I say, hell, yes. Of course, we've lost money, and I'm not promising we'll make money next quarter or anything like that. Short-term losses are there. Long-term structure, IndiGo is emerging much stronger than IndiGo went into this crisis. Thank you. Thank you. On behalf of IndiGo, that concludes this conference. Thank you all for joining. You may now disconnect your lines.