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Good evening, ladies and gentlemen, and welcome to IndiGo's conference call to discuss the third quarter of fiscal year 2021 financial results. My name is Rahman, and I will be your coordinator. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the call over to your moderator, Mr. Ankur Goel, Head of Investor Relations for IndiGo. Thank you, and over to you, sir.
Yes. Good evening, everyone, and thank you for joining us for the third quarter of fiscal year 2021 earnings call. We have with us our Chief Executive Officer, Rono Dutta; and our Chief Financial Officer, Aditya Pande, to take you through our performance for the quarter. Wolfgang Prock-Schauer, our Chief Operating Officer; and Sanjay Kumar, our Chief Strategy and Revenue Officer, are also with us and are available for the Q&A session. Before we begin, please note that today's discussion may contain certain statements on our business or financials, which may be construed as forward looking. Our actual results may be materially different from these forward-looking statements. The information provided on this call is as of today's date, and we undertake no obligation to update the information subsequently. A transcript of today's call will also be archived on our website. We will upload the transcript of today's prepared remarks within an hour. The transcript of the Q&A session will be uploaded subsequently. With this, let me hand over the call to Rono Dutta.
Thank you, Ankur. Good evening, everyone, and thank you for joining us on this call. I hope you're all keeping safe and healthy. We reported a net loss of INR 6.2 billion in the December quarter compared to a net gain of INR 5 billion in the same period last year. During the quarter, we operated at roughly 70% of our domestic capacity as compared to the same period last year. We have been ramping up our capacity, as is being allowed by the government. And during the current month, we operated at around 80% of domestic scheduled departures as compared to the same period last year.International capacity continues to be severely constrained, and we are only operating at around 28% of our international capacity year-over-year. Overall, during the quarter, we operated at around 60% of our capacity compared to the same period last year. It may be worthwhile to discuss the quarterly trends that we are seeing to assess the strength of the recovery. Our capacity increased from 8.9 billion ASKs in the September quarter to 15.3 billion ASKs in the December quarter, reflecting more than a 70% increase in sequential capacity. Despite this rapid increase in capacity and despite the fact that these routes haven't fully matured, our load factors improved by 6.9 points, and our RASK improved by 1% sequentially.We remain bullish on the demand in the market, particularly as a number of Tier 1 and Tier 2 cities are now exceeding their pre-COVID passenger numbers. And we are happy that the market is embracing the added capacity. Overall, the capacity restrictions are still a drag on aircraft utilization. And although the flights that we are operating are contribution positive, we are not able to offset all our fixed costs. Our losses, excluding foreign exchange impact, have now come down from a peak of INR 27,684 million in the June quarter to INR 8,224 million in the December quarter. We are hopeful that the government will see fit to remove the capacity restrictions in the near future to support the ongoing recovery. Our ancillary business continues to do well. And while our capacity has declined by 40.8% year-over-year, our ancillary revenues have declined by 22.1%. This performance of our ancillary business can be primarily attributed to cargo operations, which continue to perform well for us. We operated around 1,500 cargo charter flights in this quarter, and we have seen a steady increase in total cargo tonnes carried. Our cost reduction efforts have proved to be invaluable in this revenue challenged time. Despite flying 40.8% low capacity, our CASK during the quarter remained essentially flat on a year-over-year basis at INR 3.68, driven by lower fuel prices, our cost reduction efforts, high utilization of the newer fleet and positive movements in the value of the rupee. Sequentially, CASK has reduced by almost 20%. In order to increase efficiency and to further improve our CASK performance, we will continue to replace our ceo engines with the neo engine aircraft, in line with the previously stated plans. Our priority remains to provide a safe and hassle-free experience onboard our lean, clean flying machines. We introduced a system for self-scanning of boarding passes so as to promote contactless travel. The process of providing PPE kits, face shields and sanitizers for our customers and enforcement of social distancing norms continues. Our tireless efforts to provide a safer and more hygienic experience, coupled with focus on customer service, are paying off. We have gained in customer confidence over the last 6 months because of our safety measures and customer initiatives. I'm happy to report that the NPS continues to improve and our complaint rates are at minimal levels. In particular, I'm pleased to note that we improved markedly in the prongs of our service. Further, an online survey conducted by us during December 2020 revealed that 81% of the travelers are confident that IndiGo will ensure clean and safe travel. This is a 16-point improvement as compared to the same survey conducted in June 2020. Our teams have been putting in their best efforts to enhance the customer experience in all possible areas, including our on-time performance. For instance, in December, we were ranked first with the on-time performance of 94.7%, 10.8 points above the rest of the industry. For the quarter, our on-time performance was 96.6%, which is 1 of the best performance over the last couple of years. I'm pleased to report that we have received several awards during the quarter in the areas of crisis management, health and safety standards, managerial effectiveness and CSR initiatives. Favorable recognition from our stakeholders motivates us to do even further in creating additional value for our brand.Now to give you an update on liquidity. Our operating cash flow has been steadily improving. We exited June with a cash burn of INR 300 million per day and had an average cash burn of INR 250 million per day and INR 150 million per day in the September and December quarters, respectively. Given the recent run-up in oil prices and the fact that we're going into a seasonally weak quarter, we cannot state with conviction that the improving trend in cash burn will continue into the current quarter. We would like to hit the seasonally strong first quarter of next year with all cylinders running and at full capacity, at least domestically. In terms of broad capacity guidance for fourth quarter of 2021, subject to government lifting the restriction on capacity, we are hopeful of deploying about 75% to 80% of our fourth quarter fiscal year 2020 capacity. In terms of international capacity, with the exception of air bubble flight arrangements and charters, the low level of international capacity continue to remain a major concern for us and continues to hurt our financials. We are anxious to get back in a big way into the international game.With the advent of the vaccine by major players, we are hopeful that the restrictions on international travel will be lifted. The -- sorry, the enthusiasm of our employees has been a major force behind the fast phase recovery. I'm very proud of the way all our employees have displayed dedication and teamwork in the past few months.Let me step back a little and discuss the revenue environment we are seeing in greater detail. It is a very volatile environment. And we get a period of strong revenue lasting for about 6 weeks, followed by a period of weak revenue lasting for about 4 weeks. This volatility is partially driven by the fact that capacity is being added without the full benefit of the longer booking periods that we are historically used to.Through all this volatility, it is encouraging that the volume of bookings have increased steadily, while the yield is gyrating and absorbing the shocks of additional capacity. Specifically, I can state that the 4-week period starting 15th of December has been relatively weak. But again, since January 15, we are seeing strong momentum. Given this volatile environment, we are unable to provide near-term revenue or cash guidance with certainty. But we can state unequivocally, that the trend is up. And with that, let me hand over the call to Aditya to discuss the financial performance in further detail.
Thank you, Rono, and good evening, everyone. For the quarter ended December 2020, we reported a net loss of INR 6.2 billion compared to a profit after tax of INR 5 billion for the same period last year. We reported an EBITDAR of INR 9.9 million compared to an EBITDAR of INR 19.6 million during the same period last year. During the quarter, we operated at 59.2% of our year-over-year capacity. This is in line with our previous guidance of around 60%. The key highlights of the performance during the quarter are. We operated at a load factor of 72%, reduction of 15.6 points on a year-over-year basis. Our yields reduced by 4.6% year-over-year to INR 3.70. Further, our RASK reduced by 16.4% to INR 3.27, primarily driven by reduction in our load factors at 15.6 points. Our fuel cash reduced by 42.2% compared to 31.5% reduction in average ATF prices on a year-over-year basis. Despite a 40.8% reduction in capacity, we were able to hold our increase in CASK ex fuel to 22.2% as a result of our cost reduction efforts and helped by favorable trends of the rupee. Our employee costs year-over-year continue to remain 35.8% lower. Our cargo revenues has grown 38.5% on a year-over-year basis. This has helped us generate much needed liquidity during the crisis. The update on our cash position and liquidity is as follows. We ended the quarter with a free cash of INR 74.4 billion and a total cash of INR 183.7 billion. Our net cash burn per day reduced from INR 250 million per day in the last quarter to an average of INR 150 million per day in the December quarter. This was helped primarily by net contributions from operations, which nearly doubled quarter-over-quarter. Out of the INR 33 billion -- out of the INR 33 billion balance of additional liquidity we had targeted at the end of September quarter, we were able to raise INR 21 billion during the quarter, and the remaining is expected to be realized in the next quarter. Further, we also have several options of debt financing available with us in case there is a need in future. And our ongoing deliveries of neos in FY '22 will continue to provide us with additional liquidity. In light of gradual recovery, we believe that our internal sources of cash will be self-sufficient for our operations, and thus, we have decided not to raise funds through the QIP. On the other key balance sheet numbers, we ended the quarter with capitalized operating lease liability of INR 245.6 billion and total debt, including the capitalized operating lease liability, of INR 277.3 billion. We are consistently working hard to increase capacity, optimize costs and enhance liquidity, and we are eager to be back on the path of growth. With this, let me hand it over back to Ankur.
Thank you, Rono and Aditya. To answer as many questions as possible, I would like to request that each participant limit themselves to 1 question and 1 brief follow-up, if needed. And with that, we're ready for the Q&A.
[Operator Instructions] The first question is from the line of Arvind Sharma from Citigroup.
Just a small question on the accounting part. We've seen a decent ForEx gain in the quarter. Could you please explain because, normally, when we have rupee depreciating versus dollar, even the closing rate, we normally tend to have a ForEx loss. So is there something that I'm missing over there?
Yes. So ForEx losses are calculated on quarter end points. So at quarter end last year -- last quarter, we were at 73.69 to the rupee, which has now come down to 73.07. So therefore, we actually made a gain of INR 0.62, and therefore, you're seeing a mark-to-market positive impact for us. The points are quarter -- exactly quarter end points. That's how as per accounting you calculate the mark-to-market gains and losses.
The next question is from the line of Ashish Shah from Centrum Broking.
Yes. Sir, first question is that we are expecting to ramp up the domestic capacity further from here. But the passenger traffic numbers that we see over the last month or so has been sort of crawling, just a bit inching up marginally. So you think the market is ready to absorb this sort of increase in capacity from our side as well as I'm saying from the players as well?
Yes, Ashish. So as you said, it's a volatile environment. And let me tell you. In November and the first week of December, the demand was really strong, and we were quite excited and optimistic about what was coming. Unfortunately, the second half of December and running into January, the demand has become weaker, and it is perfectly coincidental with sort of the U.K. mutation panic that sort of seemed to have taken over the market to some extent. So like I said, it's -- and then again, in the second half of January, all those effects, which have gone away, and we've seen strong bookings. So it really is very news flow dependent. If the market is quiet, there's no big news coming, then the revenue is strong. So absent any another big South African mutation or something, yes, we're quite optimistic that the market will absorb the additional capacity. So we've been talking to the government, of course, on this. And we are urging them to take us to 100% of capacity as quickly as possible. And we are very confident that, that would be a good thing both for IndiGo, of course, and for the country in general.
Sure. Sir, secondly, on the yield part, I mean we, obviously, know the yield for the Q3 as such. But if you could broadly split how individual months for October, November and December? Was December a significant sort of a reversal or weakened month as compared to what we might have seen in October, November? Or the yield was uniformly for the entire quarter -- uniform for the entire quarter?
The yield followed that pattern that we've talked about. If we looked only in November, we were very happy with the results. It was very good. First -- December also started up well. And then we had a period of 4 weeks, which we were disappointed with the yield. But again, in the last 10 days of January, it seems to be coming back. Volumes have been strong all along, by the way. We've never had a problem with volumes.
The next question is from the line of Sonal Gupta from UBS.
Just following up on that question, I mean, like just trying to understand, like you mentioned a couple of times that you are eager to get to 100% capacity deployment. So do we see that -- I mean, is that the first objective? And then we look at how the yields should shape up or the profitability should shape up? I mean, like is that the first objective in the sense that full capacity would help you in terms of fixed cost absorption? Is that -- I mean, how to think about it? Because I'm just trying to understand from a profitability standpoint, like you're guiding that Q4 will not be -- I mean, you cannot assure that Q4 will see further cash burn reduction. So could you just explain?
So there are several pieces to this. First of all, Q4 is a seasonally weak quarter. So we are saying, all right, we've had a sequential improvement year-over-year, quarter-over-quarter and into a strong seasonal quarter. But coming ahead of us is this fourth quarter, which is seasonally weak. That is 1 thing. To the issue of capacity, how do we think of additional capacity? Clearly, we want aircraft utilization to be high because that's what drives CASK. So additional capacity helps CASK.Now that would not be a good thing if revenue couldn't keep up with additional capacity. But we are very confident that revenue will and is keeping up. Part of the problem is that we are not getting enough of an 8-week booking period, if you will, in adding the capacity. So we want to start adding the capacity now, open up for the summer schedule, start taking the bookings, and we are quite confident that the revenue will also come. So adding capacity helps us in 2 ways. It reduces CASK and the revenue. As we've seen quarter-over-quarter, the yields are holding up. Not year-over-year, but on a quarter-over-quarter basis, we are doing better in load factors I mean.
Sir, but if I could follow-up on that. Basically, I mean, like -- typically, I mean Q2 is anyway seasonally a bad quarter anyway. This year's Q2 is not really much of a comparison. But -- and you do see it is actually strengthening quarter-on-quarter, which has not been the trend, but significantly quarter-on-quarter, which has not been a trend this time around. I understand the environment is very volatile at this point. But despite the fact that we are deploying additional capacity and the load factors have actually gone up, we're still seeing a decline in yields. So that's what I'm trying to understand.
Like I said, the decline in yield is mostly factored around this mid-December to mid-January period, which is because of -- weakening because of the U.K. mutation fear. Going forward, we think that the revenue will be strong, especially the first quarter of next year. And that's why we're anxious to put the capacity in place for that. Are you satisfied with the answer? I see some -- I think you still have a lingering question in your mind.
No. So my question is probably -- may not be really a short term, but I just want to understand. Like I mean from a longer-term perspective, I mean, do we have a EBITDA range or something where we would ideally want to operate at? I mean, like is there a profitability target that we have rather than just capacity deployment?
No, we want to get back into the green as quickly as possible, okay? We cannot get back into the green without good aircraft utilization. So if you follow that logic, we want to be profitable. We need aircraft utilization. We need more capacity. Now the countervailing force, where you might have some question is, all this is good on the cost side. Is this also good on the revenue side? And the answer is, yes, the revenue is at least holding up well with the new capacity. And with the period of booking curve advantage, meaning the flights are open for 2 months before we actually fly them, the revenue looks even stronger. So we look at revenue on flights that have operated for 2 months, flights that have operated for 4 months and flights that have just started. And it's the flights that have just been started that are dragging us down. And that's why we want to get ahead of the curve and open up more and more flights. Costs will come down appreciably, revenue will hold up well is our formula for success.
Right. And just on that a point. I mean, like the government still has these basic minimum fares on each -- all the -- most of the main group. So does -- is that not remunerative enough in that sense, I mean like the minimum fares?
Look, the fares are lower than they should be at this point. And again, it is because we're not getting enough of our booking period. All the bookings are happening very close end, which is too short a period for us to have good load factors, good management. Management doesn't work, if you're flying at 70%, 73% of load factor, right? You need higher load factors to do better yield value.
The next question is from the line of Deepika Mundra from JPMorgan.
Couple of questions. Sir, what's your revised employee cost guidance given that you're scaling back to full operations? And secondly, when you mentioned on the yield improvement from Jan 15 onwards, could you clarify if that's just sequential compared to the weakness seen in this quarter or on a year-on-year basis?
I'll answer the employee question. So we -- as we had guided, we'll be 30% lower than our pre-COVID levels of cost. So we continue to hold on to that, and we think we'll be able to achieve that by the end of the year. So we're sticking to our guidance on employee costs.
So to your yield, and I'll combine yield and load factor into a RASK discussion. So we saw very good RASK in November. We saw good RASK first few days of December. Then we saw a decline in RASK. And I can't -- I'm not going to give you absolute numbers, of course. I can only talk trends. We saw a decline in RASK in December, below that of November. And then the last 10 days of January, RASK has been picking up again. And more importantly, our bookings are picking up. And bookings are obviously a predictor of what's going to happen in February. So that's why we are saying via troughs and the valleys, we seem to be going up now, up the slope at this time.
Okay, sir. Understood. And sir, if I may just follow-up. How sustainable is the change in cargo from here as well?
Well, cargo -- so cargo is a mixed bag in the sense we've had steadily improving trend, right, through the entire period. But going forward, as more and more capacity comes in, we don't think it's sustainable in the long run. In the sense, especially the charter cargo is going to drop off. Charter cargo, we're still seeing opportunities internationally, which we're picking up on. But domestically, obviously, more and more of the charter cargo is going into the belly of the scheduled flights. As a result, there is a little bit of pressure on the cargo yield as well. So cargo has surprised us on the plus side, but we don't think it's sustainable long term.
The next question is from the line of Aditya Makharia from HDFC Bank.
Yes, sir. This is Aditya from HDFC Securities. You mentioned about yields, obviously, being volatile. And so far, we had the benefit of crude prices being really benign. They were around $30, give or take. Now obviously, this quarter onwards, they are moving up to $55, basically across the half century mark, so to say. So I mean, how should we look at profitability in this slice?
Clearly, there is pressure on profitability from crude. There's no question. See, it's a mix of factors, right? We have to get our CASK down. We have to get our revenue stable to up. Again, our first priority should be in getting the CASK down through higher utilization. That's something -- I mean, we think that is the first step in the path to profitability. After that, we have to manage revenues. And if it wasn't for this December 15-January 15 period, you would have seen us being far more optimistic about them. If you were talking in the first few weeks of November, we would have said, hey, revenue looks great. And -- but fortunately, again, we seem to be doing just low turn back. And I think it's related, like I said to news flow, is the vaccine effective, is there a South African mutation, is there a U.K. mutation. To the extent the news flow is good, we see the revenue following that path.
Right. Okay. And how are your fleet expansion? So we are at 287 planes now. How does this look in year-end and for next year?
So as we've said before, next year, our fleet count will be down marginally, but our capacity guidance is still up in terms of ASKs because we have more seats per airplane. So we're getting bigger seats -- bigger ASKs, things like that, A321. So our capacity year-over-year will be up slightly.
Okay. Single digits is what you're guiding?
We've not given a guidance, but capacity would definitely be up.
The next question is from the line of Mr. [ Ankur ] from HDFC Life.
This is [ Ankur ] from HDFC Life Insurance. Couple of questions. So one, we always believe that post COVID, the competitive scenario would be a little more rational given the balance sheets of a lot of players in the industry. But clearly, again, we've seen these large discounts being announced for probably peak travel April to September. So what's your view on fares? So slightly longer term over the next 2, 3 quarters, how do you see fares and therefore, yields kind of panning out?
So you started off by talking about some capacity consolidation. We don't see that happening at this point. I mean everyone's flying capacity is -- you read the papers like we do. 1 of our competitors is getting more airplanes, et cetera. So I don't think there's a capacity reduction that we are talking about. We see that, overall, the revenue environment is reasonable. Clearly, although fuel price have gone up, they're still down from where they were. So we have some cost advantages. We have taken our costs out internally. So to the extent we are able to get back to 100% capacity utilization, we should see a pretty significant improvement in our cash position. So that is something we can manage. That's something we can control, and that's what we're trying to do. Revenue environment, obviously, is not within our control. But again, we are encouraged by the depth and breadth of our network, the advantages of our product. So we are seeing improvement in that context, especially connecting traffic, for example. We've got so much traffic in so many different cities coming in through Hyderabad, Bangalore, Delhi, et cetera, that we think we get a very good advantage on the connecting flight. Because of our product, we think we get good advantage in terms of group travel, in terms of charter inquiries. And so things that we can control we are controlling very well. Now we can't quite control what happens with the revenue environment. But again, hopefully, with the vaccine, it should improve over time. So looking forward to 2022, and I know that's taking 3 quarters look, but a year, we are very optimistic that, look, international will be opened and everything we talk to the government. They also assure us by April, May, June, yes, international will start opening up. So when we go look a year ahead, we are very, very bullish on what's going to happen. Our costs will be under control, and our revenue will be strong.
Fair. Okay. That's very helpful. Sir, secondly, we are adding close to about 10-odd neo planes every quarter, maybe add about 40 annually. While the planes being retired, I'm assuming end of lease life, so how much of debt gets added on our books? I think in terms of the capitalized lease liabilities. So if we are sitting at about 28,000, 29,000 total debt, how much does that increase by annually? So while the overall fleet remains the same, I would assume the overall lease liability actually goes up?
Yes. So you were seeing this addition, but we're also in the process of returning some of our owned planes. So net aircraft headcount, as Rono mentioned earlier, will roughly remain the same. We're slightly down actually. But capacity would be up. But whatever we're adding are newer planes right now, so you will see capitalized costs, therefore, going up in proportion to the retirers and what we're taking in as new planes. But remember, all of these planes also come with a very big advantage on fuel economy as well as on overall cost economics. So while on the capitalized side, you will see capitalization for these going up, but you will see overall costs from the operations of these planes being much finer than they are today.
Right. Okay. Okay. And just 1 last one, if I may. If you could share the passenger volume numbers, both domestic and international, for this quarter, if it's there with you?
I think if you can get in touch with Ankur and the IR team, I think we can get you details.
The next question is from the line of Amit Shah from BNP Paribas.
Just 1 -- 2 quick questions, actually. One more a big picture question. So you guys have gained market share during the COVID period, right. And assuming in the next 3 to 6 months, things normalize, how much of the market share gain you think you can retain?
Let me say this. First of all, we are not focused on market share. We are focused on ambition, which is to connect as many cities as possible across the country and with as much high frequency as we can. Now will that result in a higher share? Probably, but that's a side effect of what we're about. So let's talk about the major mission that we are trying to embark on. As you've seen, we've opened -- we've announced opening of 7 new domestic stations. So -- and on top of that, we're adding frequencies. As we do all that, you would expect our customer numbers to go up, yes.
Okay. And just 1 housekeeping question. What was the cash burn for this quarter, run rate?
Yes. So it was INR 150 million, INR 15 crores a day.
The next question is from the line of Achal Kumar from HSBC.
So going back to the yield question, of course, the yield has been soft, the fares had been down. So what I want to understand is that, although the traffic has reached 55% versus last year in December. And as you said, the environment is being mixed. In your understanding, how much of the traffic could be because of the lower fares and then probably shifting from trains to planes? And how much is -- according to you could be the underlying traffic growth? And related to this, last quarter, you said that you can still survive with the train traffic, but now with the fuel -- higher fuel price, do you think you can survive with the train traffic? And if not, what would be your strategy?
So IndiGo very much believes in affordable fares. So we are not pushing, nor we're going to migrate into a high-yield kind of environment at all. Now the fair environment we are in now is a little too low to be economic. So inevitably, it will tend to drift up, but it's not going to get much higher. So again, if average fares are around INR 3,500, yes, it might go up to INR 3,900, INR 4,000, and that would be fine with us. At those levels, I think we can be profitable as long as we are flying full seats in terms of capacity utilization. To the train fare, obviously, again, if we're at INR 3,100, we're almost at train fares. We had a slight signal. It's something we deserve. And given the long distances that we're talking about, it's not just Delhi, Mumbai. We're talking about Coimbatore and places like that. I think we can be -- we can afford to be at a premium. I can only tell you this, that we are seeing growth in a very nice, distributed, comprehensive fashion. Before it used to be -- and before I go back 2 years, it used to be a metro-to-metro traffic. Now it's not. Places that never used to have such strong demand in what are generally thought of as economically undeveloped areas are showing very strong demand. So we think this transition from train to air travel is happening anyway. It's happening in big volumes. And it won't be subdued just because the fares go up and then affect us. The underlying trend is much more long term, much more macro than being just sheerly price-driven.
And then -- and how about the growth in terms of what kind of growth in your opinion would be the underlying growth? And how much would be the -- how much of the traffic growth you noticed in December would be because of the low fares?
So again, I can't -- obviously can't answer your question specifically. But you can say, okay, what happens 12 months from now? You need to take a longer view of this because the short term is so clouded by the news flow. But if you go out 12 months from now, we see a lot more room for growth, particularly in Tier 2, Tier 3 kind of cities. And as a result -- and those are not going to be affected by little fare changes. They'll be affected by COVID, no question. But we're hoping a year from now that COVID issue also will subdued -- get subdued completely.
Okay. Secondly, on the international side, so international still remain uncertain, and especially with the current situation in Europe and across Europe and in the other part of the world, international seems like it still remains uncertain. And even if the international boundaries opens up, the demand could remain uncertain. I remember you talking about your international operations contributed almost 25% of total revenue. And now with international is no more there or probably highly uncertain, how do you think you would be able to offset the loss from the international side of the business?
So we are hopeful that international will start opening up soon. As we said, we are doing 28% of international capacity compared to year-over-year. There are a couple of key markets that were almost going to open but were held back because of this U.K. mutation. Examples would be Saudi Arabia, Sri Lanka. Government to government discussions were going on, and we were on the cusp of being allowed to fly there. Because of this COVID U.K. issue, it has been held back. But everything -- all indications from the ministry are that okay, in another 6 weeks, 8 weeks, all those markets will be back. Now I don't know what will happen to U.K. or U.S., but the markets around us that are important to us, Sri Lanka, Saudi Arabia, Bangladesh, all of these places, I think I'm fairly confident by April will be back. So in our markets, again, our goal is, let's get back to 100% of domestic capacity by April. Let's get back to about 50% of international capacity by mid-next year and 100% of international capacity by the end of calendar year '22 -- '21.
And the last question, if I may. I'm sorry. If -- did you get a chance or did you speak to your corporates? And what kind of response are you getting? I mean when do we expect corporate traffic to come back to the planes? And how much of the corporate traffic do you think could vanish on the permanent basis because of the usage of technology like Zoom and all? So if you could please help on that.
Sanjay Kumar is obviously very close to this subject. I'll let him field that question.
So as far as corporate traffic is concerned, we are seeing very positive response from various corporate houses, whom we've been interacting with. And especially now after the event of last year to this long holiday season of December, we are getting a sense that a lot of corporates are now beginning to travel. Just to give you an example, we have seen some kind of growth in the SME sector. And some of the industries like pharma, auto, infra, construction and other core sectors of the industry have started getting back with about 25%, 30% of the travel on the official purpose. What is not right now working is the IT and the consulting sector, which are still taking some time, but we hope that by the end of the quarter 4, I think April onwards, they will also come back to flying. So as a result, we are hoping that corporate travel will also come back in the beginning of the next year, I mean for quarter 1, to about 70%, 80%, if not more.
[Operator Instructions] We'll take the next question from the line of Kalpit Narvekar from Allianz Global investors.
Sir, so I have 2 questions. Firstly, so probably the fleet breakup, it seems like the return rates of ceos have -- like you just returned [ 6 ceos ] this year. But I remember Wolfgang talking in 1 of the earlier earnings call about the return rates picking up. So I guess that has a positive impact on your CASK as well. So do you think that will pick up the return rates in the next quarter or next year and to what run rates on a quarterly basis?
Wolfgang is here to answer your question.
Yes. Yes. I mean our goal remains unchanged, as I have elaborated last time or maybe 1 conference call before that. Maybe we'll get a lot of aircraft in but we want to balance it out in getting more or less equal number of aircraft out of the older generation. So our goal is basically we should come out of this crisis with a much younger fleet, much more efficient fleet and not creating any overcapacity, and that's what we are working on. And this is a huge start, as you can imagine, but we have been very successful in getting older aircraft out. We return it back to the lessors. And I would also want to mention that there should not be a wrong impression that we're prematurely terminating a lease. No, it's when the lease comes to an end, we undertake all the work that we can return the aircraft exactly on time with a slight delay maybe sometimes because of the COVID situation, but return it more or less in sync with the lease expiry dates to the lessors. That's what is our goal. Come out stronger with a much more efficient fleet.
Okay. Okay. But any kind of number that you're looking at on a quarterly basis?
So clearly -- so let me try and answer first. So clearly, our relieves have increased than what we've seen in Q1, Q2 and Q3 as we go forward in Q4 and Q1 next year as well. And we are still on track to return 100 planes, as we've said, by December 2022.
Okay. Okay. Okay. That's helpful. And secondly, sir, my second question is on the competitor side. There's -- I mean there's news of 1 more player coming in and there's also consolidation talks and [ PR talks ]. But -- so how do you think like capacity addition might happen on the competitor side as well? So how do you see that impacting the yields going forward? Do you think yields would hold up and, say, not going forward in, say, 1 or 2 quarters, but say, 12, 18 months down the line?
I don't see much room for a sudden jump in capacity from the competitors. I don't think the fleet is there. So whatever fleet is being unused, yes, some of it will come back. But there's no new net planes coming into the system other than IndiGo. So I think it'll be a very tempered growth. So yes, I'm not too concerned about competitive capacity suddenly coming up. If you're talking about Jet Airways or something like that, revival, those are years away, at least months away. Yes. Go ahead, Wolfgang.
If I can add here, I mean, we have the big advantage that our fleet -- we operate a ready operation, is completely reconfigured whatever this engines, everything, everything is flyable. So whenever the capacity is opened, we are ready to fly. We have the resources also on pilot side. So -- and we have a situation when you go around an airport in India, we find this quite a number of aircraft not flying for several reasons, not in our case, but with others. So that's why we also share the view that an increase in capacity by other airlines will be very muted to put it that way.
The next question is from the line of Christopher Siow from RWC Partners.
Just have 1 question regarding the demand trends and where we see traffic returning with respect to the routes between, say, metro-to-metro, metro-to-nonmetro and also nonmetro-to-nonmetro. Just wondering, I mean, whether the yields are a reflection of how the routes have reopened?
Yes. So as I think we said this in the last call and through this call as well. Metro-to-metro is really 1 of the weakest sectors. It's usually 1 of our most profitable sectors. That's not true right now. And nonmetros are doing better. So metro-to-nonmetro is where we see the most growth, the most profitability, the best season. And that's why it gives us more confidence, if you will, because metro-to-metro, promising and profitable as they were, is still limited to 6 metros. Whereas once you go into nonmetro, there's so many of them. And we see all of them doing well. And before there was a period when it was all in the South or in the West. There's a lot of markets in the East, and I'm sure you've seen this in everywhere, in all other segments as well. Sort of eastern UP, Bihar, Chhattisgarh. These are not traditionally known strong markets. But we see them as strong markets right now, and that gives us a lot of hope. So it's very much more of a distributed pattern and many more cities participating. So that we are not sort of held hostage to Bangalore, Hyderabad, Chennai has to do well, and then the airline industry will do well. A lot of smaller cities are really performing very promising in the volume growth.
The next question is from the line of [ Dinesh Singh ] from Morgan Stanley.
Just a few follow-on questions only. Firstly, could you share some number on what was the...
Sorry to interrupt, Mr. [ Singh ], but we can't hear you very clearly. Request you to use the handset if you're on hands-free.
I hope this is better. So my first question is on the corporate side. Could you share some numbers as to what was the percentage of mix corporates were at the peak? How is that changing between December quarter and what you are seeing today? And secondly, could you also share your utilization hours per day at the peak and how many hours per day are you running at today? That's it.
So let me try this. Business travel pre-COVID was about 22% of our revenue. It went down to about 8% of our revenue. And our best guess, as Sanjay was saying, we'll probably stabilize at about 15%, 16%. That is what we suspect is going to happen as far as aircraft utilization is concerned. As we've said reputedly, it's very critical for us to get that aircraft utilization up without which we see very little hope of getting to profitability. So we're very focused on that. Aircraft utilization rough numbers, as I recall, used to be around 13%. Right now, we are close to 7%, 6.8% or somewhere in that range. And again, we need to get to about 10%, 11% as quickly as we can. So have I answered your 2 questions?
Yes. Yes.
The next question is from the line of Chockalingam Narayanan from BNP Paribas Mutual Fund.
So one, quite interesting that you kind of talk about the capacity mix being slightly more towards the larger fleet. And...
Mr. Narayanan, we can't hear you very clearly. Request you to use the handset if you're...
Is this clear?
Yes, much better. Please go ahead.
Yes. So it is quite interesting that you kind of talked about the capacity coming up would be a lot more larger fleet. But meanwhile, the city pairs or the trunk routes, the metro pairs are not really firing. So 1 would have ideally thought connectivity from Tier 1 to Tier 2 or Tier 3 cities, ideally, ATR would have made sense as a fleet pair. Do you actually get more utilization on a larger plane even on a shorter stage length? How should we think about that?
So our fleet plan was obviously set in stone long time back, and we can't sort of adjust to it. So A321, part of the reason our load factor is lower, is because we have more A321s in the mix. And if we didn't have A321s, if we just had A320, our load factor, it is supported at 72, would have been up higher by a couple of percentage points. To the issue of do these markets make sense? Look, there are some markets which are clearly ATR markets. And we've announced a slew of say 7 new stations, as you saw. And half of those will be ATR, half of those will be A320s. Now there are enough of the Tier 2 cities, which demand more seats. So I'm sure you'd have seen this in the press. Cities like Chandigarh, cities like Srinagar, cities like Patna, they're way above their pre-COVID level. So it's not like everyone is hurting. As I said, metro-to-metro capacity is hurting. Volumes are hurting. But many Tier 2, Tier 3 cities are doing exceptionally well. And yes, there, we need seats, not just ATR seats, we need Airbus seats. You'll appreciate Patna, Chandigarh, those are not ATR markets. Equally though, we are announcing places like Darbhanga and so on, which will be ATR. So it is a mix, and we are lucky and fortunate to have the right fleet at our disposal. The ATR market -- we are glad we have the ATRs because many of these markets only work for ATRs. But equally, we are delighted we have the A321s because they take the -- where we need the volume, the A321s are there. And especially as load factors improve, the A321 will become even more valued.
Sure. The other 1 was because of the disruption that's happened because of COVID, has there been any sort of government to government kind of talks where the bilaterals are kind of finally changing and the Indian carriers are starting to get a better share of the traffic, wherever it's operational? Or do you think there can be a reset to this entire thing?
There is continuous government to government contact. We are asked for our views from time to time, but the ministry will announce when they have a deal. But is the conversation going on continuously? The answer is yes.
But any particular key feeder markets where you've seen the pendulum kind of move or rather the needle kind of moving?
Moving in what sense? In terms of better deal for India?
Yes, yes, Indian carriers?
Too early to say. I mean the government is obviously trying its best to get there, but we do -- we are not in a position to say whether they're successful. The government will announce that.
The next question is from the line of Varun Ginodia from AMBIT Capital.
My question is a follow-up on Ankur's question on lease liabilities going up as higher capacity planes come in into the mix. I was thinking whether there can be an offset to that trend in the form of higher discounts that you would get from OEMs and lessors, given you are taking deliveries during times that we are in right now and getting higher discounts than what you used to get pre-COVID? So will that kind of offset higher lease rentals on those higher capacity planes? Will that be an offset? That's my question.
Look, our relationship with our OEMs and our lessors are very important to us. And we have continuously dialogue going on, but I can't give you -- oh, yes, we're doing better. We're squeezing more order than, no, I can't make that statement, nor do we want to comment on that relationship frankly. We hold that pretty sacredly, if you will. Can I just jump in here, guys? I feel like there were a number of questions around. So how is this supposed -- how is this fleet supposed to work? I mean, ultimately, we all want to get back to profitability. And obviously, it's an uncertain environment. And people are justifiably asking, is this going to work out? So our strategy is fairly simple, and I think very much grounded in the reality of what we're saying. Our strategy is get the domestic up to 100% capacity as quickly as you can. And it is grounded in the reality of, yes, the demand is there. The demand is not going up in a straight line. It is cycling up and cycling down as the news flow comes in, but the trend is up. And the trend is up in a very healthy distributed way, not confined to a couple of markets, but it's like happening everywhere. In the deep South, the deep East, in the deep North, all these Srinagar, Chandigarh, these cities are doing really well as are Patna, Varanasi, et cetera. So we see a very distributed pattern. So we're very convinced that domestic 100% capacity is the right thing to do, and it will work. International, we have to work with the ministry. And the ministry and us are on the same page. Let's open up internationally gradually, just like they opened up domestic, which I think was a good thing by the way. I have to give credit to the ministry. They opened it up gradually in a very measured way. International needs to open up in a measured way. But international has to focus country by country. And clearly, the key countries right now are Saudi Arabia and Sri Lanka and Bangladesh and Nepal and a few countries like that. We like to get some more capacity in there. So that by the middle of -- I'm talking calendar year now. Middle of calendar year '21, we have 50% capacity, and end of calendar year we had 100% of capacity. So that is the path to success that we've seen. 100% capacity, get the CASK down, hold the revenue at least flat while you're adding the capacity and then get the revenue up as you move into international as well. So it's a strategy that we are very confident about because we are seeing it working. When we started in May, we didn't know what the hell is going to happen, what strategy works. We are not deviating from that strategy. That strategy is working. We need to be patient with it, give it a couple more quarters, and we are very confident that we are on the right track. Okay, back to questions. Sorry.
[Operator Instructions] We take the last question from the line of Pulkit Patni from Goldman Sachs.
Sure. This question is for Aditya. Aditya, in the previous call -- both the calls you've spoken about what are the various effort of monetization that we have done with the math of what has been the total cash burn and how much we have monetized. Could you talk about that number for the 9 months, please?
Yes. Sure. So we did overall for 9 months about INR 5,400 crores of liquidity that we were able to tap in the 9-month period. And as we said, we'll do INR 66 billion for the full year. That was the goal we'd given out last time. And we're confident of doing that INR 12 billion in this current quarter as well. So as we promised, as we had guided, at 66 -- INR 6,600 crore number for liquidity, we'll be able to achieve that. So 9-month period is INR 5,400 crores.
We'll take that as the last question.
All right, everyone. Thank you for joining us on the call.
Thank you.
Thank you.
Thank you. On behalf of IndiGo, that concludes this conference call. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.