Can you share load factors of business class in domestic market, or qualitative comments on traffic on new Stretch routes?
Stretch is still in the implementation phase. We started in November with Stretch on Delhi-Mumbai, and that route was completed. By now, we have 5 domestic routes in operation and a total of 16 planes. We continue to add 1 plane every week to come to around 40 planes with the Stretch configuration. It's a bit too early to go into specific load factors. We see routes which are very well established like Mumbai-Delhi operating strong and solid. By the end of this calendar year, all the flights are operated, and we will be able to have a proper evaluation of the load factors.
On your international aspirations with 40% international ASK target, what kind of share are you anticipating among Indian airlines ASK overall when you reach that target?
When you look to international, we should not look at what is our share in the Indian market space but at the total Indian and foreign operators. About 7-8 years ago, share of Indian operators in international traffic was in the mid-30s. We have now moved to a share of Indian operators more in the range of 45-46 percent but that is still tilting very much to regional capacity. The opportunity is really to make sure that on Europe, for example, the share of Indian operators is about 1/3rd while 2/3rd is on non-Indian operators. The opportunity in that field is massive.
Recent geopolitical tensions led to uproar against Turkish relationship. How do you see your damp lease partnership with Turkish Airlines which is up for renewal, and any mitigating measures if it ends?
Flights between India and Turkey are governed within the framework of the air service agreement between the 2 nations. Operations are fully compliant and in line with regulatory framework. On the renewal, that's up for the government to decide. We have this operation in place for some time now - it has served Indian customers well. We operate within that guidance and framework. As a good airline, we make sure we have full backup plans in case of changes - we have demonstrated over the last years our ability to adjust our network accordingly.
On thoughts on yields given where fuel prices are - how are you looking at yield there? And on spreads, how do you see them happening over FY26?
Ankur, we usually don't give guidance around the yields. It's very difficult to give guidance even for the quarter right now, because of the recent events like we mentioned. So, where the yields are going to settle is something that we will have to monitor. They have obviously gone down, given the events that have happened between May 7 and May 10. We are hopeful that there's going to be a recovery, both in terms of the booking as well as the yields. It's very hard to give guidance right now where Q1 is going to be, let alone what the total year is going to be like.
Have we started to see improvement in yield trends and cancellations that were impacted by geopolitical events, or is there any pickup over there? What are you seeing on the yield side?
April was very, very strong in terms of both passenger growth and yields. The moment the geopolitical event transpired, we have seen a significant amount of cancellations and booking trends have taken a sharp decline. What we have started to notice in the last few days is that this has stabilized and started to uptick. We are very optimistic that May as well as June will probably see a recovery quickly, the same way that geopolitical events lasted only a few days.
Globally, low cost long-haul foray has seen very mixed results. As IndiGo starts this journey, what challenges do you anticipate and how is IndiGo product changing to cater to that?
You should make a difference between low cost and low cost operations, or low cost basis. IndiGo prides itself and remains committed to being an operator with a very low-cost basis. On the flights to Amsterdam and Manchester, we will adjust product to what is required for Europe - we will have meals all across the aircraft as part of the overall price proposition. We have our premium product IndiGoStretch available on those flights as well. That doesn't mean any change in the domestic and regional proposition.
Could you help us understand the sensitivity or quantify the impact that the closure of the Pakistan airspace could have on operations and costs?
IndiGo operates 131 destinations. Due to the closure of the Pakistani airspace, we have suspended 2 - Almaty and Tashkent. So out of 131, 2 have been suspended. Then if we look to other flights, it impacts around 19 routes and a total of around 34 flights. We have 2,200 daily flights and there we have a total of 34 being affected, within 20 to 30 minutes of additional flying time. The impact for us is relatively limited and these flights is a low single-digit number as part of the total.
How much does codeshare form part of your overall revenue? How does the accounting work - is codeshare a direct flow through to profits or are there costs associated with it?
We have 2 types of codeshares. One where foreign operators have their codes on IndiGo's domestic flights - we get a certain amount of rupees on that flight, with about 10 different airlines in place. The other codeshare is where we fly to a certain point and then codeshare on someone else - with Turkish and Qantas. Accounting is simple: we collect the overall price for the entire journey and pay the partner for the remaining part. It's still a single-digit number of revenues but has increased a lot.
On cost escalation side in FY26, what are the major escalations you are forecasting? Any mitigation measures with respect to forex side?
We continue to push the FX hedging strategy where we will continue to hedge our positions related to 12 months out. We are trying to hold the cost at the similar levels of 2025, reason being we had a large part of our AOG mitigation strategy which was damp leases. We are scaling down those damp leases as some of the aircraft which were AOGs are coming back. So those offsets will enable the inflationary increases we will have in all line items. We are making this attempt to make sure that cost levels remain at the same levels as 2025.
Capital allocation plans - how much to allocate between dividends, keeping cash on balance sheet, buying planes, engines and AIF investments?
Broad allocation: a large part of cash goes towards keeping a safety net around 20-25% of overall top line. Outside of that, allocation is largely towards our growth initiatives - biggest part has been digital initiatives. We have started to acquire some assets including 8 ATRs. Beyond that, whatever is available goes towards acquisition of all forms of aircraft including wide-bodies. They may not be outright purchases - could be higher equity contribution for finance leases. We have also recommended a dividend to reward shareholders.
Have you increased your capacity growth guidance from early double-digit to mid-teens expectation now?
No, Prateek, the early double digit is for the whole year. What we have said for the mid-teens is for Q1 of FY26, this quarter. There's going to be an early double-digit growth in capacity for the full year, and for Q1FY26 there's going to be a mid-teens increase year-over-year.
Clarification - you mentioned overall costs expected to be flattish for FY26, is this ex of fuel cost?
Yes, ex of fuel cost. The way fuel has been favorable is played to be favorable. The offsets of cost are going to be the extent of the damp leases that we had, which is going to scale down, and the offset to that is going to be the increase, normal escalation that one experiences across various line items.
Moving back to the Pakistan airspace closure, do you see any changes to your network plan or strategy towards long-haul international operations? Has the decision to fly Amsterdam and Manchester from Mumbai been impacted by Pakistan airspace closure?
We suspended Tashkent and Almaty, the remainder of the 19 routes is a bit longer and no further changes are expected. When we look to further international expansion, today we only have one 787 and the others are coming in the second half of this year. I think with 787s, we can operate them from pretty any hub we have in India into Europe. We have chosen Mumbai for this time, but we can operate from pretty much anywhere. Even outside Delhi and Mumbai, we have opportunities.
How do you see opportunities for ancillary revenue given planning to sell hot meals internationally? Plans to increase ancillary revenue sales, cargo? Any challenges on FDTL side?
Cargo is an important aspect. We inaugurated narrow-body freighters about 2.5 years back. When we started our flights into Bangkok with the 787, we saw suddenly cargo loads of 8, 9, 10 tons per flight. The opportunity for cargo really is very, very significant. The share of international cargo on Indian carriers is in a single-digit number - all the rest is going on foreign operators. So the opportunity to take some of that international cargo on our widebody flights is really fantastic. On FDTL for these long-haul damp lease flights, the cockpit is being operated by the operator Norse - so FDTL is not so relevant for those. For domestic, there's a low single-digit impact for the first phase.
We redelivered about 8 damp lease aircraft in Q4 and another 5 in April. But aircraft engine rental costs increased by about INR64 crores. How should we think about this cost going ahead?
The increase was on account of more damp leases that had come in and comparing sequentially - Q2 of FY25 had significant increase in damp leases at summer rates, and then this moderated as we entered Q3 and Q4. But the number of damp leases also increased going into Q4. Going into April, we have started to return some of these damp leases. You will start seeing a decline in this category. We also introduced the wide-body Norse where the cost will come in this line item. So it's a play of rates starting to moderate downwards from summer to winter, plus the mix shift from narrow-body damp leases going out and wide-body damp lease coming in.