Highlights of the Concall 

• The Company posted posted net loss of Rs 1,194.83 crore on 66% drop in total income from operation to Rs 2,740.96 crore for the second quarter ended September 2020. Operating margin (OPM) was turnaround to 7.5% from a negative 0.2% corresponding previous quarter. Thus, the company registered profit (OP) of Rs 206.01 crore.

• The Company passenger ticket revenues were Rs 2,208.20 crore, a decrease of 69% and ancillary revenues were Rs 506.60 crore, a reduction of 45.5% in Q2FY21 compared to the same period last year. RASK was down 5.4% to Rs 3.24 while yield jumped by 8.9% to Rs 3.83 per KM. Company load factors fell by 18.5 percentage points at 65.1%.

• The Company only deployed around 37 percent of last year's capacity, which was somewhat lower than Company previous guidance of 40 percent. The gap was primarily driven by capacity restrictions imposed by various state governments for a considerable part of the quarter which had an impact on the pace of our capacity deployment.

• The Company were able to add capacity throughout the quarter and ended up in September at around 47 percent of last September's capacity.

• The Company is gradually increasing capacity and hope to be utilizing around 60 percent of third quarter fiscal year 2020 capacity in terms of ASKs in third quarter fiscal year 2021.

• The Company total expenses decreased by 56% to Rs 4,224.10 crore. Fuel CASK decreased by 43.4 percent compared to 32.2 percent reduction in average ATF prices on a year over year basis. Company overall fuel management policies including a mix of efficient engines, effective purchasing contracts and initiatives for reducing fuel burn are one of the bright spots in performance. CASK excluding fuel was up 50.7% to Rs 3.85.

• As of 30^th September 2020, Company had a total cash balance of Rs 17,931.80 crore comprising of Rs 6,973.40 crore of free cash and Rs 10,958.40 crore of restricted cash. The capitalized operating lease liability was Rs 22,931.90 crore. The total debt (including the capitalized operating lease liability) was Rs 25,419.40 crore.

• The Company has secured sanction for working capital from a bank that can help infuse additional liquidity of Rs 600 crore. This sanction also demonstrates the faith lenders have in the balance sheet and resilience of the Company. Of the Rs 6600 crore of potential liquidity increase, half has already been raised and the other half will be raised in the next couple of quarters. The Company Board has approved raising of funds by way of qualified institutional placement aggregating Rs 4000 crore.