IndiGo, India’s largest carrier, reported its highest-ever net profit of ₹3,090.6 crore for the quarter ended June 2023. This marked a significant improvement compared with the net loss of ₹1,064 crore the airline incurred during the corresponding quarter last year. The surge in revenue from operations, which rose 29.8 per cent to ₹16,683.1 crore, was attributed to a substantial increase in domestic travel demand during the quarter.
Investing in start-ups
Meanwhile, during the post-earnings call, the company said, “Given our strong liquidity position, we are planning to invest in some aircraft and related assets.” Along with this, subject to regulatory approvals, it will float a venture capital firm for investments into start-ups operating in aviation, consumer and allied sectors such as travel and lifestyle, hospitality and transportation.
“Given our large consumer base and growth plans, we believe that these investments will help us add value to our airline. As we embark on the next chapter of our journey, we remain fully confident in our ability to achieve operational excellence on an even greater scale and size,” Gaurav Negi, CFO, IndiGo, said. It has free cash amounting to ₹15,691 crore, up 89 per cent from the previous quarter.
The airline’s Q1FY24 results surpassed market expectations, as analysts had anticipated a bottomline of ₹1,769 crore on a topline of ₹15,895 crore. IndiGo’s strong operational performance and the record number of quarterly passengers contributed to the achievement of its highest-ever quarterly revenue and net profit.
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However, when an analyst asked about the company’s plans to issue dividends, it said that the dividends could only be possible when the company has a positive net worth.
“That very positive momentum from the last two quarters has also continued in this quarter as we started the new year on a strong note and reported the highest-ever quarterly revenue and the highest-ever quarterly net profit, which is the third consecutive quarterly profits. And, we are back in the black for three quarters in a row now,” Pieter Elbers, CEO of the airline said.
The company’s passenger ticket revenues stood at ₹1,668.31 crore, recording a 29.8 per cent year-on-year increase, while ancillary revenues saw a substantial jump to ₹47.78 crore, almost tripling compared with the same period last year.
Yields dip
Despite the success in revenue and profit, IndiGo’s yield per passenger experienced a slight decline year on year from ₹5.24 recorded in the June quarter last year to ₹5.18 this year, reflecting competitive pressures in the market.
On the yields, the no-frills carrier said that its yields were also higher due to the gap it filled for GoFirst. The CFO further said that in the next quarter, the airline expects the yields to be cyclically lower.
During the quarter, IndiGo’s fleet grew to 316 aircraft, up from 304 in the previous quarter. The airline operated at a peak of 1,873 daily flights, including non-scheduled flights, further solidifying its position as a major player in the Indian aviation industry.