IndiGo CEO Willie Walsh said the outlook for the third quarter remains positive, with robust forward bookings across the aviation industry, despite elevated airfares and higher fuel prices.
Speaking to NDTV Profit, Walsh said the aviation industry has entered a stronger quarter, with the second quarter traditionally being the weakest period for airlines.
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“The picture for the third quarter remains positive. We are now in a stronger quarter. The second quarter is generally historically the softest,” he said, adding that forward bookings for the industry remain robust.
Walsh acknowledged that higher airfares could affect passenger demand, but said airlines need to balance pricing with their financial sustainability. IndiGo had also seen a small reduction in its average seats during the second quarter.
“We understand that people would prefer to have lower prices, but we have to have an eye on the financial stability of the company… We're trying to absorb as much as we possibly can,” he said.
Commenting on elevated aviation turbine fuel (ATF) prices, Walsh said higher airfares would have an impact, although he does not expect high fuel prices to remain a long-term concern.
He noted that airlines in Europe and the US are recovering some of the increase in fuel costs through higher fares.
Drawing parallels with previous periods of elevated oil prices, Walsh said fuel prices are back at levels last seen in 2008. However, he pointed out that the global economic environment was different during previous episodes.
In 2008, strong economic growth continued until the collapse of Lehman Brothers in September, while the surge in oil prices in 2022 was driven by Russia's invasion of Ukraine.
“These issues tend to have an impact, but not many of them are long-term,” he said.
On IndiGo's long-term strategy, Walsh said the airline does not intend to make any changes despite the prevailing cost pressures.
Asked about potential air fare regulations, he said the airline would wait for the government to formally communicate its position.
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