Good evening, ladies and gentlemen, and welcome to IndiGo's Conference Call on our Q2 of fiscal year 2022 financial results. My name is Aman, and I'll be your coordinator. At this time, the participants are in listen-only mode. The question and answer session will follow today's management discussion. As a reminder, this Conference Call is being recorded. I'd now like to turn the call over to your moderator, Ms. Richa Chhabra, Investor Relations team of IndiGo. Thank you, and over to you, ma'am. Good evening, everyone, and thank you for joining us for the Q2 of fiscal year 2022 Earnings Call. We hope that you and your families are safe and in good health. 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, Sanjay Kumar, our Chief Strategy and Revenue Officer, and Kiran Koteshwar, our Head of Investment and Sustainability, 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 this information subsequently. A transcript of today's call will be archived on our website. We will upload the transcript of today's prepared remarks by day end. The transcript of the Q&A session will be uploaded subsequently. With this, let me hand over the call to Rono Dutta. Good evening, everyone, and thank you for joining the call. Hope all of you are keeping safe through this COVID period. We announced our Q2 FY 2022 financial results today. We reported a net loss of INR 14.4 billion for the quarter ending September 2021, as compared to a net loss of INR 21.7 billion for June quarter of 2021, and a net loss 11.9 billion rupees for the September quarter last year. The reduction in COVID cases in the country, the increased pace of vaccination, and relaxation of the testing norms by the various state governments has helped to stimulate demand during September 2021 quarter. In line with the increased demand, the government initially raised the domestic capacity caps from 65% at the end of June to 85% mid-September, and recently removed these capacity restrictions altogether. Further, international destinations and frequencies were increased under the bubble arrangements. All these factors had a favorable impact on our revenues. We carried around 6.3 million passengers in June quarter, which rapidly expanded to 11.2 million passengers in the September quarter, an increase of around 79%. Overall, we were able to deploy around 51% additional capacity in the September quarter as compared to the June quarter. Our load factors increased to 71.1% in the September quarter as compared to 58.7% in June 2021 quarter. Our yields have gone up by around 20% to INR 4.19. These factors have led to a quarter-over-quarter increase in CAR-RASK by 2.1% to INR 3.60. On ancillary revenue, our cargo operations continue to witness growth. In the September quarter, cargo revenues have increased by 60% as compared to the June quarter. We anticipate a potential structural shift from traditional wide-bodies to narrow-body cargo aircraft. With the upcoming freighters, we will be able to take full advantage of this opportunity. Our international capacity deployed increased by 58% as compared to the June quarter, reaching around 1/3 of our pre-COVID international capacity levels. We are in constant dialogue with the Ministry to open more international destinations. Also, we have recently entered one-way codeshare agreement with American Airlines. We are confident that this will be a strong partnership that will create increased opportunities for trade and tourism through IndiGo's seamless nationwide connectivity. On the cost side, the deployment of higher capacity in this quarter has helped spread our fixed costs, resulting in the CASK ex-fuel reducing by 27.2% to INR 3.25 quarter-over-quarter. However, due to headwind in fuel prices, our fuel CASK has gone up 16.2% on a sequential basis to INR 1.26. As you are aware, our fleet modernization program continues. During the quarter, we inducted 11 fuel-efficient neos and returned 13 ceos. We of course continue to occupy the number one position when it comes to on-time performance. In addition to the targeted improvement in all our operational parameters, we are also driving leadership in the area of sustainability by becoming the first Indian airline to release a comprehensive ESG report. IndiGoGreen is a testimony to our commitment towards a sustainable future and towards responsible growth. Our expectation is that our Q3 fiscal 2022 capacity in terms of ASKs will increase by around 40% as compared to the Q2 of fiscal year 2022. We are encouraged by the booking trends in October and beyond. We are currently anticipating that our October load factors will be around 76%. Our average revenue booked to date in October is now equal to pre-COVID level of revenue booked to date in January 2020. I mean. Sorry. Pre-COVID. It is important to note that we are matching January 2020 level daily booked revenues while offering 20% fewer ASKs. On the negative side, oil prices continue to march relentlessly higher. Pre-COVID, oil prices were averaging $65 a barrel, whereas now it is averaging $85 a barrel. Things are looking good on the revenue side, but the increase in input costs are cause for concern. Looking back, we have had several quarters of unacceptable losses which have dented our balance sheet. It is now time for repair and healing. I want to take this opportunity to thank our employees for running a quality airline, paying attention to the customer, and for being nimble in generating non-traditional sources of revenue such as cargo and passenger charters. Now that it looks like we are finally emerging out of the COVID crisis, we are turning our attention back to the two principal principles of our business model. Namely, continue to keep our costs down and grow rapidly. To summarize, revenues are fast returning to normalcy. Fuel prices are worrisome. We need a rapid return to profitability in order to strengthen our balance sheet, and we are excited about the growth opportunities that lie ahead of us. With this, let me hand over the call to our CFO, Jiten Chopra. Thank you, Rono Dutta, and good evening, everyone. For the quarter ended September 2021, we reported a net loss of INR 14.4 billion compared to a net loss of INR 31.7 billion for the quarter ended June 2021, and a net loss of INR 11.9 billion for the September quarter last year. We reported a positive EBITDA of INR 8.4 billion compared to a negative EBITDA of INR 13.6 billion in the quarter ending June 2021, and a positive EBITDA of INR 4.1 billion for the September quarter last year. In the September quarter, we operated at 61% of our pre-COVID capacity as compared to 44% in the June quarter. This higher capacity deployment has helped improve our performance metrics. Some of the key measures for the September quarter as compared to June quarter are. We operated at a load factor of 71.1%, an increase of 12.4 points. We had a yield of INR 4.19, an increase of 20.4%, and a RASK of INR 3.6, an increase of 13.1%. Our CASM ex-fuel reduced by 27.3%, primarily due to increase in capacity deployed and positive impact of foreign exchange movement. We were, though, negatively impacted on the fuel cost as our fuel CASK increased by 16.2% compared to the June quarter. Due to the improved revenue environment, our average cash burn per day reduced by around 39% in the September quarter. Further, we ended the quarter with a free cash of INR 63.5 billion, a net increase of INR 7.3 billion as compared to June quarter. On the other key balance sheet numbers, we ended the quarter with a total debt of INR 323.4 billion, including capitalized operating lease liability of INR 275.6 billion. With the impact of second wave abating and additional capacity deployment, we are likely to show an improving trend in all our performance metrics in the forthcoming quarter. We continue to focus on keeping our costs under control and providing world-class services to the customer. With this, let me hand it back to Richa. Thank you, Rono 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 question if needed. With that, we are ready for the Q&A. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question can press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are expected to use hands-up when asking a question. Anyone who wishes to ask a question at this time, they may please press star and one. First question is from the line of Deepika Mundra from JP Morgan. Please go ahead. Thank you. Good evening, everyone. Just a couple of questions. For firstly, regarding the yield, what is the key driver for the increase in the quarter? Is it just the fare caps, or is it something else which can potentially be more sustainable? You mentioned about a, you know, path to profitability despite the higher costs as well. Can you just talk about like a little bit of that as to how the company will get there? Okay. First on the yields, it's really some pent-up demand that is obvious, particularly international market. As each market opens up, whether it's Oman or Kuwait or Dubai, every market that opens up, there's a huge surge of demand, if you will, and prices are high as a result. Fortunately, they're not also declining rapidly. They start off high, they come down a little bit, but they continue to be remain at pretty attractive levels. The same is true domestically. We are pretty pleased with the pricing performance. Internationally, of course, it's not a pricing gap issue. On domestic, the pricing gap that the government put in place, I'm sure has some impact. Remember against that, fuel prices are really up. I think the industry's being fairly responsible, being conscious of the cost pressures that the higher fuel prices raise and not being irresponsible in pricing. Your question is it sustainable? Yes, I think it is. Now to the second question of what is the return to profitability. Clearly, we have to work on the revenue front and the cost front. Best thing that can happen on the cost front is to put more and more capacity into the market, in a responsible fashion. We are pleased that aircraft utilization continues to march upwards, week over week as we add more and more capacity. As you know, the government has removed all capacity caps, domestically. Internationally, we are hopeful that more bubble arrangements will be signed with places like Singapore, Saudi Arabia, Malaysia. These all seem to be negotiations in progress. As it happens, we'll benefit both on the revenue front and on the cost front. Yes, I do believe that we are going to keep improving our profitability quarter over quarter as this will be in forecast. Sir, if I can just follow- up on that, since you mentioned international, the 40% growth on ASKs, could you give a rough split as to what would be domestic versus international? We don't have the breakup handy right now. Let me tell you, roughly, we had 1/3 of our pre-COVID capacity, internationally, and about 85%-90% of our domestic capacity. On a weighted average basis, our capacity is down 20% from pre-COVID levels. Unfortunately, I don't have the breakup for domestic versus international. Okay. Thank you so much. You can approach Richa, and she'd be happy to share that with you. Definitely. Thank you. Thank you. Next question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi, team. Thanks for the opportunity. First question is, you know, when we are looking at October, where the business will be down 20% versus pre-COVID capacity and the view that you hold your point there, how close are you to cash breakeven now? Just to be you know, looking at October, where you are close to 80% of pre-COVID level, how close are you to cash breakeven now? That's the first question. Secondly, any comments on corporate travel? Are you starting to see any pickup over there? Yeah. Cash, I won't be able to give you a forecast. Let's, I mean, I think we can talk about the cash numbers, burn numbers coming down. When does it go back to profitability? Let's talk about it on a P&L basis. What do we think is going to happen? As I said, I think quarter-over-quarter, we will continue to improve. Fortunately, as you know, November, December are very strong months. Equally unfortunately, the following quarters, pretty much tends to taper off a little. I think we'll be skirting with profitability somewhere in there. Exactly when that happens is too early to say. Your second question was corporate travel. I'll let Sanjay Kumar answer that. We have seen almost 50% recovery of the corporate travel compared to the pre-COVID levels of January 2020. What we are seeing and getting the feedback from the market is post-Diwali, more and more corporates are going to kind of start traveling. I mean, the limitations and restrictions which were kind of ongoing by various corporate houses have been kind of taken away now by end of September and partly after Diwali. We hope that you know, the corporate travel will gain momentum post-Diwali. That's what our view is. We are already seeing growth of MICE segment. You know, people have started traveling for meetings and conferences on the corporate side. That's a very welcome sign. People have started traveling on that. Lot of corporates are now taking group travel already for their meetings and conferences. That also is a good indicator that corporate travel is slowly coming back. Thank you. Just to clarify, what percentage of mix is mix now? As I said that we are now almost 50% recovered in terms of the recovery we're seeing on the corporate side of the business. When we talk about the conference business, which used to be about, you know, pre-COVID level, about 24% of our overall business. We have seen almost 50% recovery of that. Given the situation we are in today, we hope that, you know, post-Diwali, we'll kind of gain momentum. Okay. Thank you very much. Thank you. Thank you. The next question is on the line of Achal Kumar from ICICI. Please go ahead. Yeah. Hi, team. Thank you for taking my question. I have a couple questions. First of all, we want to understand about your network strategy. You are growing your network. But then, of course, as we have seen historically that you know when you go to a new station, it takes almost like between 6-24 months for the demand to develop depending on the situation. How do you see that in your case? Are you going to expand your network or are you going to consolidate on the existing stations? How do you see and then linked to that, how confident you are that you'll be able to deploy your capacity more commercially or profitably going forward, especially given that a lot of capacity could join in. As you said yourself, we've been focusing growth. How do you see that overall, Shishir, if you could please, discuss a bit more on that? No. Okay, a couple of good things that are happening to us. First, we've discovered the strength of new markets. As we've said in the couple of last quarters, I think, while metro to metro markets had some dampening in demand, we were very pleased with the growth we are seeing in tier 2, tier 3 cities. As a result, a lot of our focus has been there. Now, as corporate travel comes back, we now have an opportunity to add back some capacity metro to metro. That's one area of growth. The second one clearly is international. International, while our revenue numbers are strong, they are on far lower capacity levels. Getting back to that capacity level is, again, a huge growth opportunity for us. Thirdly would be actually pure growth into new markets internationally, which we have not done. We've opened a lot of new stations domestically, but as soon as this, through hub arrangements or through charters or through hopefully scheduled operations, we hope to grow internationally as well. To tell you, I mean, I think, growth opportunities are very, very high. We're just waiting for this COVID and its, sort of ramifications in terms of international barriers to go away. We'll be then growing both domestically and internationally. Are you saying that you will continue to grow on your network or do you think once the demand returns, corporate demand returns, you'll be focused on more consolidation on the existing network? Okay, I'll answer it as are we adding more frequencies or are we expanding our network? The answer is both. We'll be adding more frequencies into existing markets, but at the same time we'll be expanding our network with new stations as well. Right. My second question is around the industry structure. Basically, as you know, of course, all the world is not clear how the Tata Group will operate its overall aviation business. Assuming they combine all the airlines into one, how do you see the overall competitive landscape changing for the industry? Of course linked to that, you know, we are probably going to have two more airlines, Akasa and Jet. Obviously they're not competitive right from the start, but overall they will regain some market share, you know. Overall, how do you see the industry structure developing in the domestic as well as international skies? And could you please comment on that? I think the consolidation of the Tata Group actually adds some clarity to the industry structure, which would be very helpful. Because they will be a full service carrier. Again, we are speculating. We don't know what the Tata Group is going to do. All indications are that they will be a full service carrier, that they'll be focusing a lot on international markets which we don't even compete in, the Londons, the New Yorks, et cetera. In having that whole group sort of working in a full service carrier mode, I think it's good. It's healthy for us, because there'll be some sort of natural separation in the sense that we'll be a low-cost carrier without business class, without premier economy, et cetera, and flying narrow bodies in a similar market range. They will tend to be a Vistara type model with business class and premier and wide bodies flying into a bigger circle of international markets. I think that separation is actually healthy. It'll create some discipline in terms of marketing and pricing, and that's good. To the question of Akasa, yes, there'll be another low-cost carrier. I would say that the market is India clearly has scope for a full service carrier. The field for low-cost carriers will get crowded. I mean, there's IndiGo, there's GoAir, there's Spice, now there's Akasa. That field is getting crowded and there'll be more competition there. That's how we see it. Of course, if Tata decides to run two airlines separately, one low-cost and one full service, then it'll be another challenge, you think? Yeah. We'll have to see how that evolves. Okay. Perfect. Thank you so much. Thank you. Any participants who wish to ask a question at this time may please press star then one. Our first question is from the line of Rithika Makaria from HDFC. Please go ahead. Yes, sir. Happy to hear the positive commentary after a long time. You know, I just had a question on your gains. Obviously, you're phasing out the ceos quite nicely, and that helps your environment when prices are, you know, going up. I was also noticing the fleet of other competitors like GoAir or Vistara, and we see that their neos are also pretty much maybe 30%, 50%, whatever it is. Do you think that this advantage which you have will not really last for that long because others are pretty much catching up? Yes. It's so, look, lower fuel consumption is good. It's not a competitive advantage, it's an absolute advantage. Because given the pricing in the marketplace, we need to reduce our costs and our costs come down. It doesn't necessarily mean that prices will come down. As you can see, right now we are witnessing a reasonably robust pricing environment. To the extent we bring our costs down, that's great. Now, other people get their costs down, I mean, so what? It's not like the pricing is gonna tumble as a result. I think the margins will just expand. Yeah. You know, we are doing everything we can to be fruitful near peak. Other people should do the same. I don't see that as an issue for us. Got it. Secondly is obviously our market share in COVID went up to, I think 65% plus, especially on the domestic side. Is there any medium-term market share target which you would, you know, be happy with? Because clearly the moment you cross 50%, it gets that much more difficult to maintain share. You know, there are certain costs involved with maintaining that higher market share. Is there any number you would like to have in mind? We do not target market share at all. We really just market share is just a byproduct or a consequence of our actions. What are our actions? Our actions are targeted for running a darn good airline. We want to be a world-class airline. We are a world-class airline, and we want to stay there. After that, if the customer prefers our product, again, that's a nice byproduct. The second thing that we do is we expand our network. For example, we just added Dimapur to Delhi non-stop. Now, we got a lot of thank you letters from Nagaland. "Hey, we've been waiting for this flight for so long." Now, does the market share go up as a result? Yeah, sure. But we have no target for market share. We only have target for good customer service and network expansion. Got it. Wish you all the best. Thank you. Thank you. Next question is from the line of Sazid Irani from Motilal Oswal. Please go ahead. Sir, hi. Thank you so much. My question is in this particular discussion you already had in terms of new entrants coming into the industry, so what are your thoughts in terms of the ULCC, which the other peers are also talking about? Thank you. ULCC, we've obviously studied that model at great length. Let's take again the Spirit example, because they are the sort of pioneers of ULCC. The way they got to where they are is by adding a lot of seats. They increased their density compared to the American and the United, and the costs were lower. In India, that game is played out. I mean, all of us, whether it's SpiceJet, us, Go First, we have the maximum number of seats in the airplane. I mean, the regulations don't allow any more seats, so you can't increase that. The second thing that a pioneer like Spirit would do is to charge for all kinds of things, and most importantly for baggage. Now, the DGCA again rules that prevailing order, if you will, and it says first 15 kilos free, after that you can charge. Well, that's an even playing field for everyone. If the DGCA says, "No, everyone can charge for the first 5 kilos," then we'll also be there. It's very hard for new entrants to distinguish themselves from IndiGo in terms of, "Oh, we will have lower costs." The fact is our aircraft ownership costs, as you know, are some of the lowest in the world. Our seat density is the maximum it can be for everyone. Baggage rules apply to everybody. You can brand it anything you want, but are there any really key distinctive features? We don't think there are. Thank you. The second question is, now we see more concerns on the demand side, which definitely will grow year-over-year as well. What do you think will be in sight? In the past years also we have been talking that, Air India have been the lowest and will grow year-over-year. With this DGCA removing the 5/20, let's say, 15 days onward, I mean, what do you see because the competition in that range has been strong? Any guess you can give in terms of where the yields could settle? First of all, we've been pushing the DGCA and the Ministry of Civil Aviation to remove the fare cap to beyond 15 days. Because earlier what was happening is, yes, the fares were high, but they were high for too long and therefore we could not stimulate traffic. That's why our load factors were suffering. By restricting this higher fare for the first 15 days is good, because from 16 days onward, we are now able to stimulate our traffic and that's why we're seeing load pricing improvements. From an overall revenue management, this is very good. Now, the government has been fairly responsible in sort of listening to the industry and doing the right thing. What happens if the government says, "Okay, we are just getting out of this, and you guys do what you need to do"? I think that would be a welcome step, too. I think the industry is mature enough. We can manage our own fortunes and I think we'll all behave responsibly. Sure. Thank you so much. That's it. Thank you. The next question is from the line of Prakrit Vats from Goldman Sachs. Please go ahead. Sir, thank you for taking my questions. My first question is on overall costs. Now that the government has sold Air India, I'm sure there'll be initiatives taken in order to support the industry profitability. With that view, do you think this removal of VAT which has been imposed in four states on ATF is something that could be a big support of profitability if this is accepted by other states also? That is the first question. Yeah, we certainly hope so. All the airlines, we've met with the ministry several times, and we've showed them how out of line indirect taxes are in India. As you know, we pay a central excise tax, we pay a VAT, fees, we pay IGST on repair parts, we pay excise taxes. We put it all together, and we're, like, very highly taxed as an industry. The government is listening to us, and we also acknowledge some of these inefficiencies that are there in the industry. I welcome the minister's first initiatives in terms of getting some states at least to remove them. That's only a handful, and they tend to be the smaller states. We need the bigger states in particular to jump in. Hopefully that's going to happen over time. Yes, we are hopeful, and it would be a big support for the industry. Thank you. Similarly, this whole GIFT City allowing leasing companies to come and given some tax incentives, do you think that could also be sort of profitable in terms of lower lease cost for us over the long- term if that is something that picks up? I'm just trying to understand from an industry profitability perspective, what more could there come through over the medium term? This is Jiten. Yeah, that's possibly if, you know, the GIFT City is a model which once starts developing and when some data is coming through, that'll definitely help us. But it's in a nascent state today, so very difficult to predict how it will evolve. But yes, if everything, if the way it's structured and the way government is supporting it, if all the players start playing with that, I think it'll help support our industry on an overall basis. You know, in general, to the extent the entire ecosystem evolves. We were talking about GIFT City and so forth, and I was saying that the entire ecosystem around aviation, to the extent it develops, will be very, very helpful for the airlines. As you know, whether it's line maintenance, whether it's engine maintenance, whether it's aircraft maintenance, we pay a lot of precious foreign exchange trying to get that work done. The government is making a big push. Listen, some of this ecosystem needs to come back to India, and trying to work with engine repair shops, trying to work with aircraft maintenance shops to get this done. Yeah, we welcome the move. I think the government is very sort of aggressive and ambitious in what it wants to achieve, and it's very helpful for all of us. Sure, sir. My last question is just trying to understand yields a little bit. Would you share a sense of if we'd removed the whole charters from the base, how much would the yields increase in that case? No. Look, yields have increased across the board. Frankly, they've improved in cargo. They've increased in charters, they've increased domestically, they've increased internationally. We see a gradual. Not gradual. We see sort of a comprehensive yield improvement in every segment of what we do. To an extent, as you've been saying, it's kind of inevitable. You know, yields in India just dropped way below reasonableness, and they just had to come back. Now I think with all the different strains of traffic, yes, corporate travel is slowly coming back. The SMEs, there's a lot of growth in them, construction companies, traders, and then there's movement of migrant labor as well. All of these things says, yeah, it is going to come back. That's I think is what we're seeing. It's a structural shift in my mind. It's not a one-time episodic, yields went up. Also speaking of the twenty-eighth of October, did that momentum continue even in October, the yield improvement? As I said in my opening remarks, October revenues booked per day, average revenues booked per day. That revenue hasn't traveled yet. It's just booking now, and therefore will travel in November or December. Average revenues booked per day is the same as it was in January 2020 pre-COVID. This has happened while we're offering 20% less capacity. You can see the strength in booking from that one key number. Fair point. Fair point. That is very useful. Thank you. Thank you. Next question is from the line of Anant Mundra from Kotak Securities. Please go ahead. Yeah. Thanks for the opportunity. I had a few questions from my side. The first one was, I wanted to gauge a sense from you as to how it would impact the growth in overall international volumes for India growing at 1x GDP a year. So it's growing much faster. And B, what kind of impact do you think this amendment is going to have on domestic fees for airlines? I'm not sure I understood the question, frankly. Okay, break it down into one piece. What's the first question? First question is that for long, India's international traffic volumes have grown at 1x GDP, whereas domestic has grown much faster. Does privatization of airlines make any difference to this pieces and does it start growing faster, anything domestic looking here? And the second benefit- I don't think I have an answer for that. Let me just say international, what do we see happening? International, what we see happening is that a lot of carriers have been carrying international traffic in and out of India one-stop. You know, but I was in Milan the other day, just to give you a little narrative here, and I was desperately trying to get on different airlines. First I tried Etihad to Abu Dhabi and then Qatar to Doha and then Emirates to Dubai. In every one of those airlines, there was a long line of people standing who were all Indians. I'm like, "Oh, my God." These people are going to Abu Dhabi or they're going to Doha, they're going to Dubai, ultimately to get to Delhi or Bombay. That happened in all directions because of Singapore, because of Bangkok, because of Dubai. Traffic is carried out of India on a one-stop basis. Now we have an opportunity, whether Tata do it or IndiGo does it, to carry the traffic non-stop. It's a shift from a type of traffic, and one-stop, as you know, is always lower yield. We see this as a great revenue opportunity for Indian carriers, whoever makes use of it. Domestically also, we see growth, as I said, in cities that were before not even on the network. On both sides, international and domestic, I think the Indian aviation is going in for a period of good revenue growth. Got that. Coming back to the question on yields, let me put it separately. As things stand right now, you are seeing a comprehensive improvement across, as in, yields in the last quarter, one line. You're expecting those yields would probably remain pretty good incrementally also. What is the risk that you see to the thesis actually? Because in 1Q and 2Q yields have just gone very differently. If it is unintentional, then one can even take a call on yields in this sector. Any risks on your side? Yields will be stable from here on? The risk you add to that, what do you assume? Are you saying what are the risks to you? Exactly. Exactly. The risk to yield is that airlines start behaving irresponsibly. That people run out of cash and say, "Oh my God, I need to raise cash." This happens across the world. You have a couple of bad players. Or no, I won't say bad, but a couple of weak players who are focused on cash rather than profits and sort of do crazy things. That is short-lived in my mind. Structurally, I think yields have improved and will continue to improve. We might have. Like you said, what is the risk? There's a risk of one airline sort of trying to raise cash. Other than that, frankly, I don't see too much risk. You know, we've been through a bad three years, right? COVID. Oh, my God, it was awful. We're coming out of it, and I think the structural things are going to take over from the cyclical sort of panic we've had over COVID. Sure. Thanks. Those are my questions. Thank you. Thank you. Next question is from the line of Saqib Khan from Mirae Asset. Please go ahead. Hi, sir. Also, just a couple of additional questions. The rest of the question has already been answered by you. Just want to know the cash burn during the quarter and the cargo revenue, which you mentioned that it has increased 60% potentially. Cash burn. Let Jiten answer that question. Cash burn, yes. As I mentioned in my script, we have significantly improved from last quarter. Right now our cash burn is down from what we reported in the last quarter by about 39%. Right now we are at INR 20 crore per day compared to what we reported in the last quarter. In terms of the cargo, what was the question? Let me address the cargo question. There are structural shifts taking place in cargo. First of all, let's keep in mind that both export-import volumes into India are growing. The economy is strong and international trade is growing, so that itself creates a volume of its own. Secondly, wide-body capacity worldwide is down. Thirdly is regulation. There were airlines like Cathay and Korean who were doing a lot of one-step cargo out of India, and the government has recently put a kibosh on that, so that's not allowed. The fourth is, as you know, shipping itself is in some sort of congestion. Ports, et cetera, are congested, and shipping is a challenge. You look at all these different factors. Regulation is in our favor. Shipping to airline substitution is in our favor. Indian volumes are growing. With all that, cargo really is a good story and will continue to be a good story going forward. Yes, our cargo volumes are growing, but we haven't even started the operators yet. We are, as you know, from May onwards, we're getting 4 narrow-body operators. We think cargo is gonna be a good story going forward. Mm-hmm. I'll leave it. That concludes my questions. Thank you. you. Next question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi, team. Just a question, like, I'm trying to get a sense on IndiGo, have any sort of pricing power or a yield power over peers? Because post-COVID cargo has gotten much stronger. This airline has done quite well in terms of on-time performance and customer complaints. Does it give you some sort of extra yield sort of premium that you can charge to the consumer? Any sort of takeaways from how yield in high competition sectors, like the networks are doing for you versus your peer group? Okay. Let's first start with the basic fundamentals. Airlines worldwide have no pricing power. We are commodities. People will spend INR 1,000 extra on cabs and hotels, and they will only spend INR 50 extra on an airline. Airlines have no pricing power. That's just one. Having said that, it all comes to the mix of traffic you're carrying. Are you carrying all passengers who have booked 30 days in advance with the lowest fare, or are you getting enough of the mix in the closing fares? Are you getting some better connectivity because you're connecting, you have better frequencies, you have better connectivity, and therefore you get a better mix. The only way you get to a higher yield is not through a higher price per se. You match, you look us up on any of the OTAs, we all match each other. Hopefully, with better product, with better frequency, with better connectivity, you get a better mix of traffic also. That's the only way you may see differentiation. Fortunately for us, we have those advantages. Yes. Okay. Thanks for that. Thank you. The next question is from the line of Mr. Bashar from Nirmal Bang Securities. Please go ahead. Thank you, sir, for giving us this opportunity. My first question is on aircraft in terms of this ceo to neo. By next year, you earlier indicated that all the ceos will get out, and ceo conversion will happen. Is still 80.1? Hello, this is Prock-Schauer here. Our plan is, first of all, I can confirm that we have a very ambitious exchange program, modernization of fleet. We have totally planned for FY 2020 and 2021 until March 2022 to exchange something like 100 CEO aircraft with new aircraft with all the advantages the new fleet has. Looking forward further, end of 2022, we should have basically all new fleet. A lot of things needs to be done, still in progress, but we are confident that we can return to an all new fleet by end of 2022. Sir, after this complete conversion from ceo to neo, I know that you will not give probably exact numbers for FY 2023 onwards. For next two years, what would be the ballpark indication in terms of new aircraft addition? Also, if you can help me with what would be the combination in terms of finance and operating lease. Are we okay to have this current 14 numbers or the finance, or we still would like to reduce it? Okay. So in for the next two years, and I'll just talk calendar years, usually in my mind, our fleet is really in count. It's not growing much. Marginally, it might go up by 2, 5, those sort of numbers. We have a lot of churn, so we'll take delivery again. Broad numbers, we'll take delivery of 50 airplanes, return 45 airplanes, and so on. But through that process, though, our capacity will go up a little because we are taking a bigger number of A321s. After two years, we start seeing the growth in 2024, in the year 2024 and beyond, as the new orders come in. But until then, fleet count remains more or less stable with some capacity growth. There was a second part to your question on? Yes, sir. How incentives are trending? How the? Incentives on SLB are trending now directionally? We are happy with what we're getting and yeah, we are satisfied. That earlier question on own finance and lease finance. Yes. Yes. I knew I was missing something. As you know, we own 14 airplanes. Our plan was to own a few more. However, in the meantime, our balance sheet, as you know, has weakened considerably, and our first goal will be to repair our balance sheet. We are not eager to go out and pay cash for airplanes at this time. Our first focus is on getting our balance sheet back to a healthy level, and then we'll probably go back to our original plan. As you know, airlines worldwide have a mix of leased versus owned aircraft. We are almost close to 100% leased aircraft, and we'd like to move back a little more towards ownership. That's a long way off. We need to repair our balance sheet before we even think of that. Okay, sir. Lastly on, I understand it's too early, but if I have a question in terms of April, May vacation, do you see any inquiry level or the, let's say to like April, pandemic kind of people used to inquire 4, 5 months before or booking something like that for that period right now? April, May is way too far. I mean, you know, we have visibility of about 60 days, maybe 90 days. April, May is no. We have no idea, frankly. No. Like right now, you don't see any inquiry levels or even booking for those period? No. I mean, marginal. Might be a couple here and there, but no, not nothing meaningful. Sir, lastly, on a broader sense, for next two years, three years point of view, as a industry, how do you see cargo segment grow? We see rapid growth. We are very bullish. You know, I mean, people have asked questions on the cost side. People have asked questions on the revenue side. People have asked questions international versus cargo versus domestic. Look, we see a steadily improving revenue picture. We also are cautiously optimistic that we might get some cost breaks, not because of something heroic that we are going to do because of actions the government is taking, whether on VAT, whether on bringing MROs in. Those sort of government action might help us a little on the cost side. If you can get the revenue improvements that we anticipate, and if the government helps a little bit on the cost side, I think we'll be okay. Okay. Okay, sir. Thanks. Thank you. Thank you. Next question is from the line of Arvind Sharma from Citi. Please go ahead. Hello. Good evening, sir, and thanks for taking my question. Sir, two questions. First of all, on the yield part. So in international travel, which is still almost back to one-third of the previous levels, I believe it's still mostly bubble flights. As and when you shift from bubble flights to more regular operations, where do you see the yields in that transition for international flights? You have to think of the structural shifts that are happening, right? Let me take a market. Let's take Middle East hubs. They fly wide bodies into our markets. We fly narrow bodies. As you know, wide body cost per seat is almost the same as a narrow body. We are very efficient. Hey, we can't compete against wide bodies. There's more and more structural shift towards non-stop. Take the U.S. market. Americans just said they'll do Seattle to Bangalore. They'll do JFK to Delhi. United is doing Delhi to Chicago, to Newark, to San Francisco. These non-stops weren't there before. Now, when all these non-stops take traffic away, they're taking traffic away from the Middle Eastern hubs. When that happens, there'll be fewer wide bodies that can come into the Indian market. If there are fewer wide bodies coming into the Indian market, that's good for our narrow body point to point to the Middle Eastern destinations. I see that as, you know, as an yield improvement structural shift that will be with us for some time to come. Got it, sir. Even when the regular flights start, there will not be a marked decline in the yields. That's what you are alluding to. Because I think the shift you will see in Indian aviation is that Tatas will do more non-stops into various markets around us. IndiGo will do various non-stops in the markets around us. Therefore, the yields in these sort of big hub markets, whether it's Bangkok or Singapore or Doha, will improve all of us. All right, sir. It's a long-term picture. It's not gonna happen next month. It's a long-term picture. Right, sir. Second question is on the finance part. I don't know if you can share that. In the reported depreciation amortization expense of INR 5.5 billion, how much would be the amortization on the ROU assets? And similarly, the reported interest expense of INR 5.7 billion, how much would be interest accrued on the assets? Is it possible to share that? We don't normally share details on these numbers, but I can confirm the amounts. There's a large portion of the amounts are included in that. Both amortization and this. I can confirm that. In terms of number, we don't share the numbers. Sure, sir. Thank you so much for taking my questions. Thank you. The next question is from the line of Arun Kenodia from Ambit Capital. Please go ahead. Hi. Good evening, and thank you so much for giving me this opportunity. I have two questions. Number one, your free cash balance increased quarter-on-quarter, despite INR 20 crore per day cash burn. If you can provide the liquidity injection measures that you undertook in the quarter gone by, how much did you added by way of liquidity injection? And what is the amount that you expect to do in the remaining part of the year in second half? And second, related part to that question is, any update on the QIP? If you can provide that as well, that will be really helpful. That's my first question. I'll take the cash part. Our financing initiative this time we raised about INR 12 billion. We did mention last time that we had a visibility of INR 55 billion during the various measures taken in the quarter. That has increased to now INR 65 billion. We have total visibility of INR 65 billion, of which we have utilized about INR 39 billion. This quarter also saw increase in forward sales, which has helped us enhance the number. Plus our co-contribution numbers in terms of numbers are also looking better. In an overall basis, if you look at the cash burn, the financing initiative as well as the forward sales, we have achieved a number that is being incremental. As we speak, our forward sales looks stronger in the current month also. On the QIP, we've always struggled with this issue because we never felt a need for the cash as such. We don't need it for working capital. We don't need it for CapEx. It's like why do we need the cash? The only answer is it is sort of a flood insurance. We don't know if there's a COVID three, what happens if the government shuts down again. It's those sort of disaster scenarios that we were looking at QIP for. We continue to sort of review it with the board every time we meet, but no decision taken frankly. Okay. Just one quick follow-up on the cash burn. Twenty crores per day, if I do that into a quarterly number, that comes to 1,800 crore per day of the cash burn. Your liquidity injection measure should be more than that for cash burn to go up quarter-on-quarter, right? I thought you mentioned INR 12 billion liquidity injections in the quarter. Sure. Yeah, we have got INR 12 billion of that, and we have forward sales also, as I said. Okay. Positive forward sales. That's the remaining portion. The forward sales is giving us lots of cash, everyone. Thank God. Second question is, sorry to again harp on the yield side. One risk that you highlighted on the yields momentum, the positive momentum that we saw in 2Q is if weaker airlines start pushing down fares to raise cash. My sense is isn't that a very high probability event given the cash crunch or the broken balance sheets most LCCs in the market have. Just wanted to get comfort on this yield number going forward. This looks to be a very probable event to pan out over the coming quarters. What's your- You know the competitors' balance sheets far better than I do because I never look at that. I really don't know. I can only tell you how the market is behaving and how we are behaving. These are the risks, as I said. These are not structural. They'll come and go. It might happen, but it won't sustain itself. You probably have a better understanding of it than I, frankly. Okay. Yeah. Thank you. Thank you so much. Thank you. Thank you. Ladies and gentlemen, this is our last question from the line of Krupashankar NJ from Spark Capital. Please go ahead. Hi, thank you for the opportunity. I have a couple of questions. First is on the yields and after that. I just wanted to check that with current yields, what would be the breakeven load factor given that fuel prices are being increasing in the sector space. Any highlight on that? See, load factor and yields, they tend to move in opposite directions, as you know. Ultimately, it's a question of what sort of RASK numbers are we going to produce. I'm sure the key question on everyone's mind is, when are you guys gonna get profitable again, right? I mean, that's a question the board asks me. It's a question we ask ourselves. We don't know, but we are closer to it than we were two months ago. We are closer to it than we were one month ago. Three months ago, we wouldn't even dare think of profitability. When we had that huge quarterly loss last time we met with you, no one had thought of profitability. Now we're dreaming dreams about profitability again, but we don't know when it'll happen. Right. No indication on the breakeven load factor, perhaps, something which we can look forward to? You know, it would be more sensible to ask for a breakeven RASK factor. We know what our unit costs are and what should our RASK be. Because as I said, we sort of manage between both load factor and yields to get to a good RASK number. We do have that number in mind, but I don't think we're willing to share it yet. I can only assure you that we're working hard to get there. One more question from my side is that, on the last Conference Call you had mentioned that a lot of bookings are getting bunched up towards the last few days. Looking at the trend of, you know, what you have mentioned and the cash position. How are you seeing the yields differential in the less than 50 days versus greater than 50 day channel? This is Sanjay. What I can say is, we still have some regulation around fares within 50 days. Obviously the average size during that time is much higher. As far as booking curve is concerned or booking trends are concerned, we are now, as Rono had mentioned earlier, that we are almost at par with our January 2021 levels as far as the booking curve are concerned. You know, we are getting almost, you know, 6% of our booking which is out of the booking which we are getting on the day of booking. We are seeing a booking curve now getting to a pre-COVID level of January 2020, which is a very healthy sign and a good sign. If you book in advance, and we are able to kind of push the load factor up to the required level. That is what we are seeing right now in the marketplace. That's really helpful. Thank you. Thank Thank you so much. Thank you. Ladies and gentlemen, this was our last question for today. In case you have any further questions, feel free to reach the investor relations team of IndiGo. On behalf of IndiGo, let me close this Conference Call. Thank you all for joining us, and you may now disconnect your lines.