IndiGo today assured its shareholders that Related Party Transactions (RPT) in the company are at an arm’s length and constitute less than 1% of the total revenues of the company.
This is the first time that IndiGo has officially clarified on the matter that has led to rift between its two promoters – Rahul Bhatiaand Rakesh Gangwal.
Replying to queries by shareholders, IndiGo CEO Ronojoy Dutta said that value of RPTs that the company has signed is about Rs 156 crore, which is less than 1% of the company’s total revenues of Rs 30,000 crores.
“There is not a single case, where RPT is not at arms length. All RPTs better by audit committee as well,” Dutta said at the company’s AGM held today.
He also added ‘that the company has not had any single whistleblower complaint.’
Gangwal had alleged that IndiGo was getting into high-value RPTs with Bhatia promoted InterGlobe Enterprise.
A large number of RPTs were then reviewed. Taking the example of the airline’s corporate office Gurgaon, Dutta said that the office is closer to a metro station and moving the office away would mean inconvenience to about 2000 employees, who use metro to come to office.
On the future expansion, Dutta said that the company plans to grow by about 30% a year for the next few years.
“We expect that half of that growth will go international, half will go domestic. We are very optimistic about international,” Dutta said.
Dutta added that the flight range is limited due to the aircraft they operate and looking at planes like Airbus 321 XLR and wide-body aircraft for future expansion.
“XLR is a great plane, we think, but that plane cannot reach London. The planes can take us to Seoul and we would be looking at markets like these through XLR,” he added.
He added that the company is also looking at wide body aircraft.
“We are looking at the plan for wide body. It would not make sense, if we launch wide body aircraft without business class. So, we are discussing everyday to ensure what model do we follow to make wide body work,” Dutta said adding that they brainstorm every Tuesday on the issue.
