IndiGo - Internationalisation, Capacity Building Initiatives Are Strong Business Moats: ICICI Securities
Strategic focus remains on internationalisation.
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ICICI Securities Report
We attended InterGlobe Aviation Ltd.’s analyst meet held at its iFly Training Centre (Gurugram) on March 23, 2023. The airline remains focused on growth (more than 15% available seat per kilometre growth in FY24, doubling the fleet by 2030) and internationalisation (increase ASK mix to 30% over next two years from 23% in nine months-FY23).
These goals are intended to be achieved within the already existing business framework (low cost, hassle-free service, on-time operations with uniform fleet).
Q3 FY23 was an inflection point as per the management considering that it proved IndiGo’s ability to successfully operate at a larger scale than it did pre-Covid.
We remain impressed with the capacity building efforts in all aspects which includes involving people, processes and technology – which are long-term business moats. Key takeaways of the meet include:
fleet guidance of 350 aircraft in FY24, which is a positive surprise;
30% international ASK mix in two years, which should keep the domestic supply scenario balanced;
expectation of strong yields in Q4 FY23 adjusted for seasonality; and
recognition of the importance of cross-sell / upsell initiatives.
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