Aviation activity – Air India, Akasa, Jet Airways – will spur growth: Aloke Bajpai
AS travel recovers in India, Ixigo’s revenues are also seeing a rebound. According to the company’s financial statement published on its website, the Gurugram-based travel booking app saw revenues grow 2.8X to Rs 379.6 crore (US$47.6m) in FY22 from Rs 135.56 crore in previous year (FY21).
Confirmtkt (a wholly-owned subsidiary) contributed with Rs 128.2 crore revenue or more than 33% of the ixigo balance sheet. This is almost equal to ixigo’s entire revenue in FY21. Venture Catalysts-backed Confirmtkt was acquired by ixigo in February 2021 in a cash and stock deal.
Ticketing income was the major source of revenue for ixigo constituting 95.3% of the total operating revenue which surged 2.9X to Rs 361.92 crore in FY22 from Rs 126.25 crore in the previous fiscal year (FY21). Collection from advertisements and referrals grew 81% to Rs 14.42 crore in FY22 from Rs 7.97 crore in FY21.
WiT catches up with CEO and co-founder Aloke Bajpai.
Q: What contributed to the surge in revenues?
Our focus as a company on the fast growing next billion user segment allows us to tap into growth from Tier 2/3/4 markets in India when it comes to online travel penetration since our train and bus focus allows us to serve them well. Our recent acquisitions of ConfirmTkt and Abhibus are also contributing to our growth. Also, we have created more brand awareness around our unique product features across flights and trains such as ixigo assured, which allows a no questions asked instant full refund in case our users decide to cancel their ticket for any reason.
Q: What is performing better than expected?
We were able to continue growing our transacting user base among our active users, and our ability to convert more top of the funnel users to transacting users has been improving the last three years. We also continued last year to grow our top of funnel downloads, MAUs etc at a pace that we are happy with.
Q: Worse than expected?
Last financial year obviously we had two quarters impacted by COVID (AMJ and JFM), but despite that we managed to grow decently. We expected the overall aviation market to bounce back much faster in India. However due to the Russia-Ukraine war and the related impact on oil prices and airline fares etc. we have seen that impact the bounceback in the air industry overall. Even as of the June quarter the market had still not fully recovered to pre-COVID levels.
Q: What is state of recovery of travel in India? It seems everyone’s saying this is the tipping point for India to really take off – that the potential we’ve been talking about for years is finally going to be realised?
The reserved train market in India had recovered to Pre-COVID levels and beyond in FY22. Flights and Buses had also reached 75-80% recovery compared to pre-COVID levels as of June quarter but these markets are likely to recover fully by the end of this FY. Hotels will take a bit more time since corporate demand has a far way to recover to Pre-COVID levels. However the best leisure hotels are consistently sold out during long weekends, which is a healthy sign.
There is a huge focus on infrastructure development across rail, roads, airports, ports etc in the government currently, and the future looks very exciting for India as a result. With the purchase of Air India by the Tatas, the entry of Akasa and the upcoming re-entry of Jet Airways, we expect aviation to see more competition and growth over the next few years.
Improved connectivity through the UDAN scheme has also brought several Tier 3 towns on the aviation map. Efficiency of highways has increased with better infrastructure and FasTag automated toll collection. Indians are bullish about their own prospects in the time to come. McKinsey is calling this India’s century, and I am inclined to believe that will be true when it comes to the travel industry as well.
Q: What’s responsible for these conditions?
A young aspirational demographic, strong focus on higher education and entrepreneurship among the educated Indians, and more opportunities in the private sector are helping per capita income improve.
Q: When will you go public? All plans on track?
We cannot comment on the timelines for obvious reasons. We filed our DRHP in August 2021 and received a SEBI approval that is valid till mid-December 2022.
