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After seven consecutive quarters of profit, InterGlobe Aviation slipped into the red posting a net loss of ₹986 crore in September-end quarter.
In the same period last year, the company, which operates India’s largest domestic airline IndiGo, had reported a net profit of ₹188 crore.
The airline management blamed seasonality, temporary headwinds such as grounding of aircraft and inflationary pressure for its weak performance. Total expenses grew 22 per cent to ₹18,666 crore on a year-on-year basis.
Heightened competition, especially on international routes, also impacted the yields. Load factors remained flat at 82.6 per cent. Revenue from operations grew by 13.6 per cent on a y-o-y basis to ₹16,969 crore while deployed capacity was higher by over 8 per cent. This is far slower than one recorded last year contributing to nearly 20 per cent revenue growth in the second quarter of the last year. While the airline is seeing a demand boost due to festive season unit, revenue could see a moderation compared to last year.
The airline’s Chief Financial Officer Gaurav Negi said expenses were higher due to various factors such as increase in value added tax on aviation fuel, higher fuel burn owing to increased congestion at airports, increase in aircraft lease rentals among others.
On the positive side, the number of grounded aircraft which stood in mid-70s has reduced to high 60s. The number of grounded planes is set to reduce further to around 40 by next March. This is expected to ease some of the cost pressures as the airline can return some of its leased aircraft.
“We continue to capitalise on the growth of the Indian market and associated opportunities and at the same time remain a cost leader in this competitive market,” CEO Pieter Elbers said.
New destinations
Elbers announced IndiGo would soon start flights to five new destinations including Penang and Langkawi in Malaysia this year.
With the strong demand for international travel, the airline is also set to increase capacity deployed on international routes to 30 per cent of total up from the current 28 per cent.
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