IndiGo's efficient cost base strong liquidity offer lot of options to deal with rising expenses CEO Willie Walsh

New Delhi, Oct 29 (PTI) Amid rising fuel prices, IndiGo CEO Willie Walsh on Thursday said the airline has a very efficient cost base and strong liquidity that provides it a lot of options to deal with higher operating costs.

     In his first media interaction after taking charge as the airline's chief in August, Walsh discussed about the airline's performance in the September quarter, where it reported a loss of Rs 1,879.1 crore due to increased fuel costs and rupee depreciation, offsetting higher revenues.

     Noting that IndiGo has a very efficient cost base, Walsh said it was starting from a position of strength and that it was important to look not just at the cost base but also the cash position.

     "We have very strong liquidity, and that gives us a lot of options that many of our competitors won't have available to them. So we will continue to look at any measure that can be taken, but you should not expect any significant cost measures being undertaken by IndiGo.

     "We can always trim some of our costs, but we have a very efficient cost base to start with, and obviously the higher cost base of many of our competitors is an additional challenge that they face in the current environment," the airline CEO said.

     In the second quarter of the current fiscal year, the total income of InterGlobe Aviation, the parent of IndiGo, rose to Rs 24,311.9 crore from Rs 19,599.5 crore in the year-ago period, according to a regulatory filing.

     However, total expenses in the latest September quarter surged to Rs 26,188.4 crore, with aircraft fuel expenses surging 67.2 per cent to Rs 9,966.8 crore.

     The airline said exceptionally high fuel costs and rupee depreciation weighed on profitability.

     With rising fuel prices, triggered by the West Asia crisis and geopolitical uncertainties, the operational costs of airlines have gone up, a situation that is also resulting in higher airfares. IndiGo and other carriers are also levying fuel surcharges on tickets.

     "Obviously, we want to try and minimise the increase in fares that we are encountering. It has always been the case that India stimulates a lot of additional growth through the low fare that IndiGo has been able to offer in the market.

     "But we have no choice but to look to increase fares in an effort to offset the very significant increase that we have seen in the fuel bill," Walsh said during the virtual briefing.

     He was responding to a question from PTI on the airfare situation and whether rising airfares are impacting demand.

(This story has not been edited by THE WEEK and is auto-generated from PTI)