Market leader IndiGo on Tuesday announced that it has signed a term sheet with Avions de Transport Regional G.I.E. (ATR) for 50 ATR 72-600 aircraft which it plans to operate as part of regional connectivity scheme (RCS) announced by the central government. The airline plans to launch its turboprop operation at the end of this calendar year.
RCS also called as Udan (Ude Desh ka Aam Naagrik) has been conceived to connect the underserved or unserved airports in the country; by offering fares starting from Rs 2,500 so as to allow common man to fly. The government has created a corpus of Rs 500 crore raised by taxing flights on trunk routes.
The announcement by IndiGo comes as part of latest quarter announcement in which its profit fell by about 25% from Rs 583 crore during 2016 fiscal to Rs 440 crore during the 2017 fiscal, primarily due to the increase in aviation fuel prices.
According to Aditya Ghosh, president and whole time director, IndiGo the airline has the flexibility to reduce the number of aircraft deliveries (ATR) based on certain conditions. "This term sheet is subject to reaching a mutually satisfactory final purchase agreement with ATR and the engine manufacturer. Assuming that both the intended final purchase agreements are reached, IndiGo plans to launch its turboprop operation at the end of calendar 2017 and expects to induct up to 20 ATR aircraft by December 2018."
The airline at present has a fleet of 131 aircrafts including 19 A320 neos operating 896 daily flights at its peak demand to 44 destinations including six international cities.
Expected fleet of 170 A320 aircraft at the end of fiscal year 2018. Indigo, which is counted among the most profitable of airlines in India and the world, has been a one-aircraft-type player, in order to keep the cost under control and thereby improve its efficiency.
Though the airline management has so far refrained from divulging the routes on which it plans to bid as part of Udan and other details operational details, they clarified that the mainline operations and the RCS will be operated autonomously with just few functions like legal, HR, finance, and ground handling remaining the same. This will be done to avoid the complexity which may occur running two different aircraft type.
During an earnings call, the airline officials said that for fiscal year 2018, year-over-year increase in available seat kilometers (ASKs) is expected to be 25%, excluding the planned ATR operation. First quarter fiscal 2018 year over year capacity increase in ASKs is expected to be 22%.
The airline which holds over 40% market share in the country had revenues from operations to the tune of Rs 4,848.22 crore during the latest January-March quarter.
As per a press release, on the back of steep rise in fuel costs, the company's total expenses in the fourth quarter of last fiscal jumped nearly 31% to Rs 4,523.04 crore. The total expenses stood at Rs 3,458.20 crore in the same period a year ago.
