Good evening, ladies and gentlemen, and welcome to IndiGo's conference call to discuss the first quarter of fiscal year 2023 financial results. My name is Steven, and I will be your coordinator. At this time, the participants are in the 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 call over to your moderator, Ms. Richa Chhabra, from Investor Relations team of IndiGo. Thank you, and over to you. Good evening, everyone, and thank you for joining us for the first quarter fiscal year 2023 earnings call. We have with us our Chief Executive Officer, Ronojoy Dutta, and our Chief Financial Officer, Gaurav Negi, to take you through our financial performance for the quarter. Wolfgang Prock-Schauer, our Chief Operating Officer, Sanjay Kumar, our Chief Strategy and Revenue Officer, and Kiran Koteshwar, our Chief Programs Officer and Head of Investor Relations 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 prepared remarks today. The transcript of the Q&A will be uploaded subsequently. With this, let me hand over the call to Ronojoy Dutta. Thank you, Richa. Good evening, everyone, and thank you for joining the call. We announced our first quarter of fiscal year 2023 financial results today. We had an impressive quarter in terms of revenue performance with the highest ever capacity, highest ever revenue, highest ever yields, and highest ever unit revenue. Unfortunately, the spike in fuel prices, coupled with the depreciating rupee, prevented us from translating this revenue performance into net profitability. Excluding the foreign exchange impact, the net profit stood at INR 3.6 billion for the quarter. We reported a net loss of INR 10.6 billion for the quarter ending June 2022, as compared to a net loss of INR 16.8 billion for the quarter ending March 2022, and a net loss of INR 31.7 billion for the quarter ending June 2021. The capacity deployed in the quarter ending June 2022 was around 35% higher than the previous quarter and around 7% higher than our pre-COVID capacity. The unit revenue for June 2022 quarter came in at INR 4.69, an improvement of around 18% sequentially. Yields also improved sequentially by around 19% to INR 5.24, and load factors increased by 2.9 points to 79.6%. With these improvements, we reported our highest ever quarterly revenue of INR 130.2 billion, an increase of around 59% sequentially. On the cost side, fuel and currency movement continued to remain a significant headwind for us and led to sequential increase in CASK by 6.1% to INR 5.08. CASK ex-fuel, ex-Forex for June 2022 quarter decreased by around 18.1% as compared to March 2022 quarter to INR 2.38, primarily due to better absorption of fixed costs. We resumed our scheduled international operations to most of our pre-COVID destinations, and we are now roughly operating at pre-COVID international levels. We launched new service to Bahrain on August 1st and plan to launch Ras Al Khaimah soon. Domestically, we added Deoghar as our 74th domestic destination. Along with network expansion, we have a host of initiatives to enhance our customer experience. These include initiatives by the digital team, expanded meal offerings, and launching of new airport products. We are also pleased that IndiGo is being recognized as a worldwide leader in providing value to its customers. We recently won ATW's Value Airline of the Year. Our core strength continues to be our highly skilled and engaged employees who support our growth plans and enable us to deliver a consistent high-quality product. We are grateful for the dedication and loyalty that our employees have demonstrated throughout these difficult times. Looking ahead, the second quarter is seasonally the weakest quarter. Given this seasonal weakness, we do anticipate the second quarter revenue performance to decline sequentially. As of date, we do not see any evidence of revenue weakness apart from seasonality. Unfortunately, the seasonal revenue decline, coupled with high costs, will lead to profitability challenges. Our long-term prospects are highly encouraging. We continue to see robust growth across the network, and our expansion is being accompanied by high growth in connecting traffic. Additionally, the XLRs, which are currently expected in 2024, 2025, will allow us to capture nonstop international traffic, which is now only served through one-stop competing hubs. We continue to remain very bullish about our future, and this is reflected in our fleet order. We are also excited about the opportunities in the cargo market and are looking forward for the commencement of commercial operations of our first two freighters in October 2022. We continue to tide over the current set of challenges with one of the best cost structures in the industry, a laser-sharp focus on our cost, and our fleet modernization program. Now let me hand over the call to Gaurav to discuss the financial performance in detail. Thank you, Rono, and good evening, everyone. For the June 2022 quarter, excluding the foreign exchange loss, we were profitable at INR 3.6 billion. Overall, we report a net loss of INR 10.6 billion compared to a loss of INR 16.8 billion for the quarter ending March 2022. We reported an EBITDA of INR 7.2 billion with an EBITDA margin of 5.6% compared to an EBITDA of INR 1.7 billion with an EBITDA margin of 2.1% for the quarter ending March 2022. Our financial performance was better during the June quarter compared to the March quarter, mainly on account of the strong revenue performance. Revenue from operations was INR 128.6 billion, an increase of around 60% against a capacity increase of around 35%. Our RASK increased by 18.3% to INR 4.69, primarily driven by sequential increase in our yields by 18.9% to INR 5.24. Our CASK for the quarter was INR 5.08 as compared to INR 4.79 in the March quarter. Our CASK, excluding fuel, was INR 2.90 for the quarter, a decrease of 9.6% from March 2022 quarter. Excluding the impact of foreign exchange and fuel, our CASK remains a good story and decreased by 18.1% from March 2022 quarter to INR 2.38. This improvement was primarily driven by an increase in capacity deployed. While the losses on the last two years have adversely impacted our balance sheet, we continue to maintain a healthy free cash and have a good visibility in terms of our financing initiatives. We ended the June quarter with a free cash of INR 83 billion, a net increase of 7% as compared to the March quarter end. Our total cash as on 30th June 2022 was INR 190.7 billion. We ended the quarter with a capitalized operating lease liability of INR 344.7 billion and a total debt, including the capitalized operating lease liability, of INR 392.8 billion. Our ROU assets at the quarter end were INR 214.4 billion. Moving on to the September quarter, we expect our year-over-year capacity to increase by 70%-80%. We are focusing on continuously strengthening our customer base, our fleet, our network, and our employee talent pool. Fuel and Forex continues to be a challenge, but once these normalize, we should return to profitability. With this, I will turn it back to Richa. Thank you, Rono and Gaurav. 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 question if needed. With that, we are 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 the touchtone telephone. An operator will take your name and announce your turn in the question queue. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi Team, thanks for the opportunity. Given I only have a space for one question, so I will focus more on the coming quarter. But two key things that happened in the last few days, one is that one of your key competitors have gone under enhanced surveillance list and have been added to that capacity. And secondly, a new airline is starting. So in that regard, how do you see deals sort of playing out in the coming quarter? Mostly if you talk about it in relative to the sort of the routes where the new competition has come in. I mean you've been under pressure over there, so I understand you've been quite a small proportion for you, but how do you see indeed the coming quarter? So the first thing is, first of all, this is The good thing is, first of all, the seasonal weakness, right? As we said in our opening remarks, we do expect to see just a seasonal decline in yields. Let's look at the longer term and not talk about the quarter-over-quarter. The fact is, the competition is increasing. As you know, they're adding flights. As you also rightly pointed out, it's quite small at this. The capacity is quite limited at this point. One of our major competitors has clearly reduced capacity a lot over the last year or two, and that is helping us, no doubt. Going forward, one healthy sign in the industry is, I think, whether it's older airlines or newer airlines, they're all run by very professional veterans of the industry. So far we see no irrational behavior by anyone. Everyone's behaving sensibly, and I think that's a very good sign for us. To answer your question in a certain manner, we don't see too much impact from the competition, and if anything, we see a healthy industry environment as far as prices are concerned. Oh, great, Ronojoy. Thanks. I'll come back in the queue with my second question. Thank you. The next question is from the line of Ashish Shah from Centrum Broking. Please go ahead. Yeah, thank you for the opportunity. Sir, on the front of the employee cost, could you indicate if we have now reached the normalized levels of salary cost or there are still certain revisions pending? If there is any number that you can leave us with for the financial year 2023 on the salary cost. Thank you. Salary, we have now reverted, across the board, to pre-COVID levels. The one group that was held back a little was pilots, but we've just announced that by the end of October, they will also be at pre-COVID levels. In effect, we are going back to employee costs of 2019. One of the things we look at is what are our employee costs for ASK, and I think if you're looking for what do I plug into my model, employee costs will be roughly 2019 or a little bit, or a little bit higher. That would be a good index point for you. Sure. You mean this in a per unit, context, right? The salary cost- I'm looking at employee costs for ASK, and will be slightly higher than 2019. Sure. Got it. Thank you, sir. Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead. Sir, thanks for taking my question. Sir, given the fact that you are sounding very buoyant about demand in general, and we've done very well this quarter in terms of revenue, as I look at the next seven to eight quarters, we'll be giving back quite a lot of capacity as we also add capacity. Net-net, there's not gonna be a meaningful change in our overall fleet. In this context, if the market continues to grow, is there a possibility we might delay the return of some of the A320ceo? Because it seems that you know, we could probably lose market share if we were to return all the A320ceo. Just wanted to get your sense on how you look at the market in context of our fleet being exchanged old versus new. Good point. We are optimistic about the trend in revenues that we see. We do see forecast strong demand going forward. Now, one of the things is that if, as you might have noticed, we still have about a 7% load factor gap from where we should be. We did very well on yields in this quarter. We would have liked to have done better on the load factor side as well. First of all, the seven points of load factor that we need to catch up on, and although our fleet will not be growing in total numbers, we do expect our customer numbers to grow. Importantly, we have the A321s coming. Although fleet count doesn't go up, the number of ASK go up. All in all, I think we are well positioned. We have enough empty seats, if you will, to fill up. Will we look at redoing the fleet at this point? The answer is no. We want to remain efficient, and if necessary, we'll try and speed up some of the deliveries to the extent that's possible. Unlikely that we will go out and get some old A320ceo. Sure, sir. Helpful. Thank you. Thank you. The next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead. Hello, everyone, and thanks for the opportunity. My question, if I heard it rightly, you said that, IndiGo is already at pre-COVID levels of international volumes. If that is the case, just wanted to get a- Yeah. Specifically, let's talk about destinations first. We've added back every station we had pre-COVID, with the exception of China, Myanmar and Hong Kong. Those are the only three cities/countries that we are not in. If you look at total number of departures in June, we were at the same level as we were pre-COVID, although we're missing a few stations. International has also performed strongly. Domestic has performed stronger, but domestic got a head start. As you see the international build, we are very optimistic. It's catching up nicely in terms of strength to domestic. And as a result, we're opening Bahrain, we're opening Ras Al Khaimah. We'll add wherever we can. And to the extent things improve, we might go back to Hong Kong and China as quickly as we can. Just to again clarify, what you are meaning to say is that the number of destinations have come back to pre-COVID levels or the actual volumes for you in international have come back to pre-COVID levels? Let me specify. I'm talking of number of departures, and I'm talking of stations. As far as stations are concerned, we've gone back to every station with the exception of three, the Chinese, Guangzhou and Chengdu, Hong Kong and Myanmar. We are operating on every other station. In terms of number of flights, in June, we were back at pre-COVID levels. Did I answer your question or is there some lingering question you have? Sure. Basically a number of flights are now broadly comparable to pre-COVID levels. Yeah. That's. Yeah. Just a follow-up question on this one. Just trying to get a sense of if the domestic international mix in your revenues are starting to become a lot. Better or favorable in versus what it was earlier? Which means is the international share of revenues for you going up right now with COVID? We expect, at this point, domestic is a little stronger than international, so we are very focused on the domestic expansion. As I said, international is just lagging by a quarter or two, and we'll expand international also very quickly. Got that. Thank you for your answer. I'll get back to the queue. 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 questions. I had two. One is about the load factor versus yield. Of course, previously last call, Ronojoy Dutta, you mentioned that it is about maximizing the revenue, but of course, given that, the next quarter is gonna be under tremendous pressure, seasonally weak quarter. Would you really change your strategy towards load factor than focusing on yield? That is my first question. Second is about the performance now in domestic versus international. How do you see international routes performing, given that still inbound international business is still lagging behind? But then are you talking mainly about strong international demand on the Middle East side? Do you see the strong demand across your international destinations? Thanks. Let me talk about international demand first. International demand to the West has always been stronger than to the East. That's traditionally true for India for some time. What is the good news is that of late, markets like Thailand, Vietnam, they're performing much stronger than they did even two, three months ago. As I said, there was a build in domestic and there's a build in international. The domestic build happened faster than the international, but now the international build is growing as well. I don't think the Eastern markets will ever be as strong as the Western markets. The fact is, the Eastern markets are also showing some growth. To the first question of yields versus load yields versus load factors. As you said correctly, we're always looking at maximizing revenue. Our goal is on every flight, let's just maximize the revenue. We found the yields to be strong and we're willing to sacrifice some load factor. The issue really is what happens in the fourth quarter. We know our revenue was strong. Now, where was it strong and why was it strong? Let me just sort of break it up into a few markets. Number one, corporate travel has been strong and very strong. Before we'd say, "Oh, corporate travel is coming back." Well, now it is back, and it's back nice and strong. That's good news. Then is the tourist traffic. I think to some extent, we've replaced the COVID bug with a travel bug, and people are traveling like crazy to these tourist destinations. Markets like Srinagar, Leh, Dehradun, Bagdogra, Goa, they're all performing very well. That's a huge positive. The third positive really is what's happening in the new stations. Normally, when we open new stations, we say, "Oh, they'll lag and struggle for six months." They've just matured much faster than we ever expected. Whether it's Bareilly, Kanpur, Agra, Durgapur, I mean, we opened these stations recently, and they're all performing great. To give you an example, we just opened Deoghar, I think July 12th or something. Already, Delhi-Deoghar is booked solid full. We always thought Delhi-Deoghar would do well, but we were hesitant on Kolkata-Deoghar because we thought, "Oh, well, that's by train it's only a four-hour train ride, so maybe it won't do so well." Well, guess what? It's at 88% load factor. Just, that just shows the substitution we're getting from rail into airlines in all these short-haul markets. Whether it's Delhi-Lucknow, Delhi-Dehradun, Kolkata-Deoghar, hey, people are giving up trains and coming to us. We see all of those as very positive signs. Yes, we'll see some weakness, but the question is what happens in the third quarter? Well, in the third quarter, like I said, we were missing seven points of load factor in the quarter we just reported. We hope to get that 7% load factor back. The third quarter should be a very strong revenue performance. If, and I know this is a big if fuel and foreign exchange behave just a little bit, I think we could have a perfect storm of profitability in the third quarter. That's what we're working towards. Perfect. Thank you. Thank you, sir. I have a follow-up, but I'll be in the queue. Thank you. Okay. Thank you. The next question is from the line of Mitul Shah from Reliance Securities. Please go ahead. Sir, thank you for opportunity. Sir, I have question on second quarter as you indicated would be weaker seasonally, but compared to pre-COVID level, what is the sense on that side for domestic as well as international? International you highlighted very well. Domestic you can give more detail. Secondly, sir, on the ATF prices compared to last quarter, around INR 123 per liter, what has been the average for July or any indication you can give? Does anyone have average prices on fuel? Richa is going to give it to us in a second. What was the other question? Oh, the second quarter, how does it compare? Look, I'll do it sequentially. It's easier for us. I mean, I can't remember what happened a year ago. Compared to this quarter, we will have some yield declines, and so revenue will be weaker. Again, we probably won't see that much weakness in July, August, but we all know September is a horrible month. So we are sort of, yeah, saying September we know is going to be bad and all the indications are it's going to be bad. It's not likely to be any worse than previous Septembers. All Septembers are bad. That'll drag our quarterly performance down. again, the important thing is what happens after that. October, November, December, we think is going to be good and strong, and we are gearing up towards that. most of all, I want to get those seven points of load factor back. Yes, sir. Thanks. Sir, if you can give detail on MTM, this Forex loss, how much would be MTM and how much realized out of this INR 1,420 crore? A large part is gonna be MTM. Close to INR 1,300 crore is gonna be MTM, and a very small portion is realized in the remainder. Thanks a lot, sir. I'll get details from Richa on ATF side. Thank you. The next question is from the line of Chintan Sheth from Sameeksha Capital. Please go ahead. Thank you for the opportunity. Sir, if you can speak closer to the handset, please. Your audio is very low. Okay. Now it's audible? Yes. Yeah. On expenses, there are two parts to it. One is on the fuel side. If I look at our ATF price growth, which is 95% YoY and 36% Q-o-Q, sequentially, if you look at our FASK, our FASK has increased 38% versus ATF price increase of 36%. Traditionally, historically, what I've seen is that we have been able to, you know, manage our fuel cost much better than the actual ATF price increase. This quarter seems to be a little off. Just wanted to check on that. Second is on the aircraft engine rentals. The per ASK basis, it has declined from, you know, above INR 0.80 close to INR 0.90 to now INR 0.71. Just wanted to check whether this trend should be what we should look at going forward or there is any F&B gains or something which has brought it down for this quarter, Q1. Yeah. That's it. On the first question related to ATF, given last time we were using largely the A320neo fleet because the demand was less, that's why the mix of the A320ceo have gone up for this quarter. That's why you'll see a difference in terms of, the comparison that you were doing. That's what's driving the ATF question that you had. By the end of this year when we retiring, this will normalize, hopefully. Because when you compare year-over-year, the utilization was more of the A320neo fleet. Given the high drive of that. I was comparing sequentially from 38% sequentially increase in ATF price, our FASK versus sorry, 38% increase in our FASK and 36% increase in ATF price sequentially. No. Also this crack spread has widened quite a bit, as you might have read in various newspapers. We still have a small spread relatively between Brent and ATF fuel. That spread has really widened, and we're talking to the petroleum ministry and the aviation ministry saying, "What the heck is this? Why should it be so wide?" That widening is really a cause for concern for us, and I think that's showing up in the numbers. What spread you are talking about? Sorry, I couldn't get that. There's the price of Brent fuel. Right there's the price of aviation fuel. That difference, which is the refining of aviation fuel, is called the crack spread. Okay. The crack spread was historically for the last seven years at a certain level. For the last six months, it has widened a lot. Although you'll say, "Okay, Brent went up this percent, but ATF went up much faster." It's because the spread is wide. What has it to do with, you know, increasing in our FASK higher than the increase in ATF prices? That is the actual question. What is that to do with the? See, if you're comparing one time period to another. Mm-hmm You said the fuel cost seems to be going up faster than you expected. The reason the fuel cost is going up, and I'm sure you're indexing it to what happened to Brent. You're saying, "But, IndiGo, your fuel costs went up faster." You'll see that's true for all airlines in India. We've all been talking as an industry group to both the Aviation Ministry and the Petroleum Ministry saying this is not right, that spread should not widen so fast. Okay. The second on the rentals. I'll get back to you. Thank you. Could you just repeat that question? Okay. Thank you. The next question is from the line of Deepika Mundra from JPMorgan. Please go ahead. Hi. Good evening, sir, and thanks for the opportunity. Just a question on the yields. Like last time, could you give us a little bit color on, you know, July and August, how it's panning out? As you enter the festive season, I know you mentioned September looks weak already. Why is the yield not relatively strong given the pent-up demand overall in the system with corporate travel reopening? Well, again, a lot of factors affect the revenue by season. It is school opening, it's monsoon season, it's something called Shraadh. All these things tend to hold back the second quarter revenue. It's been true historically. This is not a one-year phenomenon. If you look at the quarter-over-quarter, that's always been true. There's a, yeah, sort of extrapolation of underlying demand, and then above that, over that you have to overlay the sort of seasonal ups and downs. Our first quarter is a reasonably good quarter, the second quarter is a very weak quarter, and the third quarter again is a very strong quarter. You have to overlay that on the revenue trends. The revenue trends have not changed, and we're saying that over and over again. We saw no weakness in the revenue trends, but the seasonal overlay has all these anomalies. Right. How sustainable do you think these kind of year-on-year yield increases are going forward as well? Look, we've been saying for the last three to four years that yields in India are abnormal and total outliers. Nowhere in the world are ticket prices this low. We said, "Hey, there's only one direction they can go," and that is up. That's what we are seeing. If the economy is reasonably strong, then yields in India can only go up. I mean, as you know, we've said many times only 7% of Indians travel. Now as we are opening all the stations, we are seeing all these train travelers coming to us, and they of course connect to other destinations through our hubs. Of course, our yields are going to go up. That is all happening long term, I believe. Long-term, there'll be more entrants into the aviation market in terms of taking flights. There'll be people taking more frequent flights, as we've seen in all these tourist destinations. Middle-class income will be growing. All these are long-term fundamental factors which make us very optimistic about the yield trajectory. If we were starting from a high point worldwide, we'd say, "Oh, yeah, we've sort of matured." We haven't. We're starting from a very low point worldwide. A worldwide comparison. Yeah, we think yields are sustainable and will continue to go up. Thank you. Thank you. The next question is from the line of Nikunj Mandowara from UBS Securities. Please go ahead. Yes, sir. Thank you for the opportunity. Yes, great to see demand returning back to pre-COVID levels, sir. The load factors still remain, you know, quite below the pre-COVID levels. I think pre-COVID in Q1 we used to do 89%, while we have done 79.6%. Sir, just wanted to get a sense of how do you think this will behave going ahead? Do you think we can, you know, hit the mid-80s from Q3 onwards or, you know, we'll be more comfortable at 80% and then rather raise the pricing considering higher costs, sir? This is what we think is happening. We've clearly raised prices a lot. We, meaning the industry, has raised prices a lot. Part of that is just pushed by cost pressures. You know, fuel goes up, you have to raise the ticket prices. That's one factor. The other factor is we were already starting from an abnormally low point, so they had to go up. Yeah, we see them as, you know, as we increase the prices, there's been a little bit of resistance. We don't see that resistance in corporate travel. We don't see the resistance in tourist travel. But obviously, in the most price-sensitive segments, there's been some resistance. That, I think, explains the 7%-8% decline we see in load factors. Again, we think as we go into the third quarter when demand is so strong and as people get used to these higher fares, that we'll get those 7% load factors back. What would we like to see in the third quarter? We'd like to see yields remaining where they are or inching up a little, and we'd like to get our 7% load factor back. That's very helpful. Thank you, sir. Thank you. The next question is from the line of Noel Vaz from Asian Markets Securities. Please go ahead. My question has been answered. Thank you. Thank you. The next question is from the line of Krupashankar NJ from Spark Capital. Please go ahead. Hi. Good evening, everyone. Thank you for the opportunity. I had a question relating to the earlier comments on, you know, gaining traction in shorter lead distance traffic. What we have traditionally seen is that the rail traffic has already reached well above pre-COVID levels, and in fact, the air traffic on the domestic side has just started picking up. Historically, what we have seen is that softer fares are key for shift from rail to air. Is you know Kolkata what you had mentioned earlier, is it more of a flash in the pan or is this something that's structurally changing on shorter lead distances as well? Is there any other instances where you've seen that shorter leads have done relatively better? Yeah. That's why I also mentioned places like Delhi, Dehradun, Delhi, Lucknow, et cetera. In the short-haul markets, you know, this train versus air factor, the travel market is growing, and it's probably growing quite strongly. Now, if that happens, I do expect the rail traffic will also grow, but we'll also grow. Within that, at the high end of the customer segment, we'll probably attract more than the rail traffic, and I think that's what's happening. Calcutta-Durgapur, we didn't put in any introductory fares. The fares were pretty attractive then, and so we never expected any issue in load factor, and we were surprised when we got that. I think that shows that the travel demand is strong, and we both benefit. Just a follow-up on that. One can expect that, I know given that IndiGo has been continuously adding newer routes on shorter lead time. Incremental fleet can be deployed towards shorter lead traffic. Is that a fair assumption to make going ahead? I think it'd be fair to say that I wish we had more aircraft at this time. We are limited by the number of aircraft we have. Given that, we're going to try and push load factors and yield. If we had more aircraft, we'd fly to more destinations, yes. Thank you. That's very helpful. That's from my side. Thank you. The next question is from the line of Miten Lathia from Fractal Capital. Please go ahead. Hello, am I audible? Yes, sir. Yes. Please proceed. Yeah. Since this is perhaps the last call that we'll be hearing from Rono, just wanted to thank Rono for all the insightful interactions that we have had over time. Wish you a very happy retired life, Rono. Just one question. Thank you. Thank you. Just one question from my side. You know, if you were to look at current routing that you have with the large fleet, where would the departures for aircraft be, when things stabilize, let's say in FY 2024? I didn't understand that question. Departures. Number of departures. Oh, when will the number of departures stabilize? Departures for aircraft, yeah. Departing. Yeah. As I said, fleet count-wise, we are already sort of maxed out, so we can't fly more departures. Our departure growth will be somewhat limited. Fortunately, we have the A321s coming in and the A320s going out, so number of seats will continue to grow. Total number of departures, we are probably maxed out at this point. But, uh- I really wish we had more airplanes. You know, looking at the revenues, if I could produce another 20-25 aircraft, it'd be great, but we don't have them. Got it. Thanks again, and wish you all the best. Thank you. Thanks a lot. Thank you. The next question is from the line of Ashish Shah from Centrum Broking. Please go ahead. Yeah. Thank you for the follow-up, sir. If you could comment on the cargo business, how is that shaping up? What's the growth measure that we can use on a YOY basis or sequential? And how are the yields panning out in the cargo business? Cargo has been a very good story, frankly. We look at the numbers month-over-month, week-over-week, and it's a straight line, not rapid growth, but the lines are pointing upwards. We see lots of opportunities around us. As I said, Bangladesh, Vietnam, these are great locations for us to get traffic from. China is a wonderful opportunity. We think we'll, our freighters should do well there. Overall, whether it's belly cargo or these freighters coming, we see lots of growth. Now, we used to have a few cargo in cabin, as you know, during COVID, but with the increase in passenger demand, all those planes have come back on the passenger side. Cargo is also struggling for more capacity. Cargo is a great business and we're looking forward to the two that are coming in October, and after that, two more coming in next year, I think. Yeah. Next year. Next year. Good business and we are quite optimistic. In the meantime, month-over-month, cargo tonnage, cargo yields are both up. Sir, could you leave us with some numbers? Any indication on the growth in the volume of cargo that you could give us and anything on the yields? Any numbers that you can leave us with? We're looking at double-digit growth in revenues, I can say that, and it's a mixture of yields. Look, I'm also looking for what are the negatives. I know I keep talking about all the positives, so what are the negatives? It is back to fuel and MTM. This mark-to-market drives me crazy. There's nothing we can do about it, and every quarter-over-quarter we get this big hit. We just need that to either stop going up or reverse a little. If by the third quarter MTM reverses, that'd be great. Fuel, it went up to $120 a barrel or something. At least it's now down at $100, so that's a good news story. I hope it goes down a little. Our challenges and our problems are all macro. They're not macro, external demand anything. It's all this fuel and geopolitical and dollar and so on. All other measures, they look very promising. You know, we've always had a lot of faith that the Indian market is going to grow strong with improvement in demand, with improvement in yield, and I think we're seeing all that. Quarter-over-quarter, we are seeing great yield improvements. Sure. Thank you. Thank you, and all the best, sir. Thank you. Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead. Thanks for the repeat question. This is for Gaurav. Gaurav, if I look at the capitalized operating lease liability for the quarter and compare it to March, it seems a little higher relative to the kind of fleet that we have added. Anything that you can explain, you know, why the increases is quite significant relative to the fleet added? No, it's just largely on account of the addition of the fleet. We've got some, 12 new additions that have happened during the quarter, so that's what's driving the increase in the lease liability, nothing else. There would also have been retirements, right, parallelly? Yes. There were six retirements that we did do. Net-net effect, it's largely the increase of the new ones that came in. The retirements were the, relatively a smaller number. Got it. That helps. Thank you. Thank you. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi, team. Thanks for the opportunity. Firstly, congratulations to Rono for steering the airline through a very challenging environment, and best wishes for future endeavors. Moving on to the question, if you look at IndiGo, the airline is in a way moving from a 20% kind of a CAGR capacity growth phase that it was in between financial year 2015 to 2020 to now a much slower capacity growth phase. Do you think this will lead to better profitability per seat? The reason I say that is that in the 2017-2018 cycle, I remember the airline used to say that when capacity slows down, the profitability per seat should improve because new routes take six months to mature and there's a lot of front adding of costs in a high growth phase. All else equal, do you think that sort of framework still holds that the profitability, actually leaving income and other variables outside, should be much better per seat in a lower ASKM growth phase? You would definitely expect that, right? If you're growing rapidly, you have both cost pressures and revenue pressures. You're opening new markets and hiring new people. Pilot training is high, maintenance training is high. So both on costs and revenue, yes. As you slow down, clearly both numbers improve. We would expect that. Having said that, our appetite for growth has not slowed. If we had the planes that we would fly them, because there are lots of new markets that are so exciting out there. You know, I mean, just to mention a few, Tel Aviv. I mean, we've had our eye on Tel Aviv for so long, and now the Saudi airspace is open now. We'd like to go to Africa. We'd like to connect China to Africa. All these things we want to do, but I guess we'll just have to wait till we have the airplane. Great. Thanks for the response. Thank you. Thank you. The next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead. Hi, and thanks for the opportunity again. The question that I had was more focused on your CASK ex-fuel, ex-Forex, which is at INR 2.4 and broadly comparable to pre-COVID levels. This is happening at a time where, you know, load factors are still not fully kind of back at pre-COVID levels. I just wanted to get a sense of can this number further go down maybe because the pre-COVID base was high? Or how to think about this number incrementally from INR 2.4 that it is at this point, I think? Okay. One is, look, our fixed costs are made up of our lease costs. Fact is our lease costs are going up a little. Just newer airplanes, more expensive airplanes, so they're inching up a little. We have salaries. I mean, we didn't. We held back on salaries for two years, now we are reverting them back, and I'm sure there'll be, you know, cost pressure that way. Just in terms of inflationary pressures, our maintenance costs go up year-over-year with the sort of escalation clause every year. I think there will be cost pressures. Again, we're looking at the spread between RASK and CASK. Yes, CASK will tend to inch up, but our goal and our efforts and ambitions are to improve RASK at a much faster rate. Look, we've proven that we can do that, right? Over the last couple of years, our yield performance has been strong, and it gives us faith that we can keep improving on that. Understood. You know, there's so much benefit to our scale also. I mean, we look at our metros, and so much of it is now just connecting traffic. When we add another destination, whether it's, you know, from anything into Hyderabad or Bangalore or Kolkata from another station, there's so much connecting traffic that we get out of it. Those scale benefits are huge, and I think that's one of the strengths that IndiGo has, and therefore we're able to improve our yield at a faster and faster rate. Because we can offer so much different ways and, options to people to travel from A to B at a faster, with more frequency, all that. Yeah, our yields will continue to go up. I have full confidence in that. Got that. Well, that was my only question, Rono. Just a note of thanks from my side. Thank you for being around for so long. Last two years, my pace of learning would have been half without you. Thank you for that. Hey, guys, many of you have expressed this sentiment. I'd like to reciprocate, and I would like to say that I really enjoyed working with you. I've enjoyed your questions. It's been intellectually very satisfying responding to your questions. Thank you. Thank you. The next question is from the line of Achal Kumar from HSBC. Please go ahead. Hi. I have a couple actually, given that I got a second opportunity. First of all, Mr. Rono, when you talked about the yield, you very much focused on the kind of, you know, pent-up demand and corporate travel and all those sort of things. Of course, you know, corporate travel has been a big boon for the yield. If I remember it correctly, a few quarters back, I asked you this question about the risk to corporate demand, given that now Tata has taken over Air India, and then previously when Jet used to fly, they used to enjoy a lot of corporate market share. Once Jet ceased operations, corporate demand shifted to you because there was no other option. Now, given that Tata is coming with Air India with a much bigger size, and I guess, they have a lot of, I mean, Vistara has a nice product. How do you see the risk to your corporate traffic with Tata coming into the competition? And if that is the case, how that could impact the yield? Secondly, how do you see the overall competitive landscape? Previously we were expecting industry to be more rational, but now if you see Vistara has become very aggressive. I mean, their load factors are ranging about 86%-87%. Looks like you know Tata may not be very rational player. If that happens and they have strong financial muscles how do you see the overall competitive landscape? Sorry that's a bit negative but on the downside I'm looking at. How do you see the overall scenario in terms of competition? Finally how do you see the advance sale now? You have your free cash has increased. How much of that is coming from advance sale now? If you could please help on these. Thanks. Okay. First let's talk about the competitive landscape and let's focus on us versus Air India slash Vistara. Remember, we are not head-to-head competitors. They are focused on what? First of all, they're very focused international, and that too long-haul international, not short-haul international, with a business class product and so on. Great. I mean, you know, that's not a market we compete in, and therefore their domestic strategy is tied to that. What does Vistara, Air India try and do? They try and fill their big wide bodies to all these long-haul destinations, and you can see that in the way they do the network. We are not in the same ballpark or say we are not fighting in that same sandbox with you. We are in the domestic market, small towns, and frankly, metro to metro is one of our weaker segments because, yeah, there's too much capacity. Everyone's fighting yields, et cetera, et cetera. That's not where our performance is getting stronger. Corporate demand is back. That's great. Relatively metro to metro is still weaker than metro to non-metro and non-metro to non-metro is very strong for us. We really are sort of separated by customer segment, by destination, by network. They'll do great, I'm sure, just connecting to international, and they're fighting the Lufthansa and the Qatar Airways. We are not. We're not fighting. We are providing service to small towns and short-haul markets. That degree of separation by itself I think helps us. Yes, ultimately people can get high load factors, but they have to worry about cost. Yes, it's true that some full service carriers are just matching us on price and therefore getting high load factors. At what cost? Because our cost structure is much better. Now, you could say that they don't care about the cost at this point. Yeah, true. Maybe. In the long run, they'll have to. Our spread between this unit revenue and cost is something we like, you know, and our cost structure is low. Therefore, the reason we are enthusiastic about our vision, our network is that it's very different from everyone else's. Even when we go international, we'll be going to places, as I said, like Tel Aviv, Nairobi, Milan, where no one flies. We'll be the only one, and we're just not competing with Air India. We're taking traffic away from Dubai or Singapore or someone else. You know, I would say us and Spice, us and GoAir are head-to-head competitors. Yes, we fly in the same markets. We do exactly the same thing with the same product, same destination, same network. Air India and us are quite separated. They'll do well in their space, we'll do well in ours. Mr. Dutta, I mean, if I know it correctly, they are looking for 300 A321s, I mean, isn't that for the domestic market? I mean, of course you're right. They're connecting domestic to international. That will be offered free to the international. Unless they have a strong domestic, I mean, you know, how can they provide the feed. 300 A321s, I guess, is gonna be for the domestic market, isn't it? I mean, of course domestic plus neighboring international markets. How would that have impact on- Yeah. See, that's a very astute observation. Domestic market leads to international strength. International strength does not lead to domestic strength. You've never seen it in reverse, right? I mean, you can talk about the U.S. experience. There was Pan Am and TWA, and there was United and American, and see what happened, right? Yeah, our biggest strength is our domestic market. Will we be able to leverage that international strength? I absolutely think so, and we will. Now, there'll be other competitors who have a strong international market. Can they leverage that back into the domestic market? Much, much tougher. Much tougher. Thank you. The next question is from the line of Gagan Dixit from Elara Capital. Please go ahead. Yeah, thanks. Thanks for taking my question. My question is more related to this airfares discipline side. At this time, we have observed that this rise in the yield is taking care of the increase in the fuel price, if we adjust for the Forex losses. In the past, typically we have seen that whenever the fuel price rises, airline is not able to increase the airfare. This time it looks like that there's some discipline comes in this airfare. Sir, how much do you think is this discipline sustainable and why this is so, sir? That's my question. A large part of it is experience. I mean, we've all gone through various cycles, and I think people have learned. I think at this point we are blessed with very professional veteran leaders in all the airlines, whether it's Akasa or Spice or GoAir, you name it. Everyone's been around. They know how to play the game. Yeah, industry discipline is really a critical factor to success for all of us. Fortunately, we are seeing it right now. That's good. I don't see that changing. Yeah, because earlier we have seen that a few years back, I think whenever IndiGo tried to increase the fares in line with the airfares, I think in somewhere 2018, other airlines don't follow, so might be IndiGo takes the risk of losing the airfare. Is this some temporary phenomenon, sir? Because might be some new airlines might just start to, might be that we see again that competition come back that we have seen in the past. Is this something you'd risk, you see, sir? Well, the thing is this. I think we've all learned over and over again that this, reducing fares doesn't result in higher revenues. I mean, we've all learned that lesson. If you reduce fares, everyone will match you down. No one is going to provide a pricing umbrella, right? It never happens, and we won't either. If people reduce fares, we'll all reduce, we'll all suffer. We all know that, how the game plays out. Therefore, as I said, I mean, you look at all these airlines, the people there have been there 18, 20 years. Yeah, they know that as well as I do. Yes. Yeah. Thanks. That's my question. Thank you. Thank you. Ladies and gentlemen, that was the last question for today on behalf of IndiGo. That concludes this conference call. We thank you all for joining us, and you may now disconnect.