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IndiGo warns of weakening market after “unusual” October

IndiGo warns of weakening market after “unusual” October

IndiGo warns of weakening market after “unusual” October
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By Anu Sharma  Oct 25, 2019 6:23:40 AM IST (Updated)

IndiGo has warned of sustained weakness in the market after “unusual” fares in the strong month of October, which has two important festivals of Dusshera and Diwali.

IndiGo has warned of sustained weakness in the market after “unusual” fares in the strong month of October, which has two important festivals of Dusshera and Diwali.

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“July and August were strong months. September, we started seeing some weakening but then September is always weak. And now October is typically a very strong month with two big Indian holidays-Dusshera and Diwali. Generally, we don’t see anyone coming out with sales during this period because demand is so strong. This October was unusual,” Chief Executive Officer Ronojoy Dutta said in the post-earnings conference call.
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Dutta added that a strong month like October does not ideally witness airlines offering discounts on fares but two players offering discounted fares in the middle of festivals indicate that the market has slowed down.
“In the middle of Dusshera, we had one competitor coming for sale and now the second competitor comes with the sale. That says there is weakness otherwise why will these competitors come with the sale,” Dutta added.
Full-service carrier Vistara had announced a special 48-hour sale starting October 10. The sale was for travel between Oct 10 and Mar 28.  GoAir had also announced pre-Diwali 'super saver fares' deal for 24 hours on Oct 17. This was valid for travel between Oct 20 and Oct 23.
Discounted fares in the festival season have also forced IndiGo to reduce its growth expectations for the current quarter.
“Revenue during the festive season was somewhat subdued. We are expecting a flattish year-on-year unit revenue growth for this quarter.  We are still early in the quarter and things will of course change,” Dutta added.
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