Sachin Salgaonkar: I have three questions. First, Mohit, again, I just wanted to clarify regarding this entire one-off. So basically, all the negative, which could be factored in is factored in, right? Ideally, we should not see any incremental one-offs coming from Go First in coming quarters.
Mohit Kabra: Yes, Sachin, that’s right.
Sachin Salgaonkar: Got it. Second question, just on this entire capacity issues at airlines, again, one is a near-term perspective, which you guys said. But there is also a risk about the Pratt & Whitney Indigo engines continue to create a bit of an issue going into next year. So just wanted to understand where do you guys see this resolving and what kind of impact that could have, let’s say, from a next 12- to 18-month perspective?
Rajesh Magow: Yes. And maybe Sachin, I can take that. No, I think it’s a valid question. I guess, I was trying to sort of highlight that as a part of my script speech as well. So if there is this whole winter schedule that has been filed recently of any indication, that is actually quite encouraging, where there is a net addition. All factors are considered including the engine issue, there is an overall net addition to the supply of about 7%, 8%, so which will give you a sense of the fact that — despite the fact that the Go First supply has been out of the market now for a while, and SpiceJet has also not necessarily been operating at 100% capacity, but both Indigo and Air India, including Air Express, Vistara, they’ve been adding more claims.
And projections — and because the orders have been placed for last now couple of quarters, the supply on an every month on a net-net — on a net sort of addition basis is going to flow in every month pretty much. And that’s the kind of projection that is already out there that has come from all the airlines together. So that gives you an indication that the things are going to ease out definitely in the coming quarters. And from a long-term outlook standpoint, to be honest, I don’t really see an issue because, ultimately, all these problems are going to get resolved one way or the other. Either it is going to be — the engine replacement that is going to fall in place slowly and gradually, or there are going to be other alternatives that are going to be available because the demand momentum from a long-term standpoint is clear based on various other sort of projections, if you see it more from a long-term standpoint, multiple sources.
And operationally, all these — I’m sure everyone is sort of working hard to find alternatives if there are any blockers that come along the way. So — but we’ll have to obviously watch the situation. But like I said, the next 6 months projections seem to be giving an indication that it’s going to start improving overall situation.
Sachin Salgaonkar: Rajesh, in your opening remarks, you also commented about a bit of an issue on demand, especially given the harsh monsoon. I wanted to just understand how has been it progressing in the last few months given the fact there is a World Cup and we are heading into the Diwali season. Any general comments on early December bookings? Are we still seeing issues associated with demand or that started to reverse off?
Rajesh Magow: So Sachin, July, August, September, that specific monsoon-related issue was temporary and was confined to certain cities of the country, not necessarily across. And the demand overall sentiment remained positive. In fact, it was at its peak around August, September. In September, it was like all-time high. And for the current quarter, and as we know from the historical trends that October, November, December, again, is a high season quarter. But it’s early days right now because it’s just end of October. Of course, because of the World Cup, wherever specific where India was featuring as part of the games, in specific cities, we’ve seen bookings and actual transactions growing both for hotels and flights. But on an overall basis, the season will play out more in November.
Historically, also it ends up sort of playing it and starting with third week of October, end of November and then goes into — well into middle of December, which is yet to come. And so I guess it’s overall early days for the quarter, but I don’t see any reason why it will be any different.
Sachin Salgaonkar: Got it. And last question is on your margins. Great job guys in terms of holding up these margins well despite the negative operational leverage in the seasonally slower quarter. So the question out here is, is this the low selling and marketing below 5% of [GOV] is something which you guys see sustainable going ahead? And hence, there could be a bit of upside as to your medium-term margins?
