Rahul Bhatia, co-founder and interim CEO, Indigo, has asked the staff in an official e-mail to help bring down costs considering the poor financial performance of the Airline in September. While Bhatia clearly stated his disappointment, he also assured the staff that the situation will improve very soon.
Indigo’s parent company, InterGlobe Aviation, reported a quarterly loss of Rs 6.521 billion last month, for the first time ever since its listing two years back. Bhatia urged the employees to adopt cost-reduction tactics while ensuring that customers are offered courteous and smooth services.
While business is usually slow during this time owing to schools reopening and the rains, the performance was extremely bad this year with excessive competition and rapidly rising fuel prices. As a result, Indigo’s operating costs went up by Rs 13.46 billion this quarter.
While IndiGo did attempt to raise ticket prices to be able to handle the rising costs, with the increasing competition in the Indian aviation market, it ended up with its average fares actually falling in the quarter.
However, Bhatia was positive that IndiGo still has the lowest operating cost in the industry and a strong balance sheet, which will help recover its position and drive it towards future success.
Indigo is not the only airline to be affected by the rising fuel prices and the depreciation of the rupee. Jet Airways too has been facing the worst financial crisis with employees still waiting for their September salaries.