Indian carrier IndiGo stays profitable on demand, forex boost
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INTERGLOBE Aviation, the operator of India’s top airline, IndiGo, reported a second consecutive quarterly profit on Thursday (May 18), boosted by foreign exchange gains and as strong demand for air travel more than offset a jump in fuel expenses.
India’s biggest airline by market share has benefited from a strong post-pandemic recovery in domestic air travel in the world’s third-largest aviation market.
The carrier flew 23.4 million passengers between January and March, 60.5 per cent more than the year-ago quarter and nearly 5 per cent higher than the previous quarter.
Its yield, a metric for profitability, rose 10.2 per cent year-over-year to 4.85 rupees (S$0.08) per kilometre in the fourth quarter, while load factor, a metric of how full its planes are, improved by 7.5 percentage points to 84.2 per cent.
IndiGo’s available seat kilometres, or passenger carrying capacity, grew 49.2 per cent year-on-year to 30.4 billion, more than its own forecast. It expects capacity to rise 5-7 per cent sequentially in the current quarter.
IndiGo’s revenue grew 76.5 per cent in the quarter, slightly outpacing the 74.3 per cent jump in fuel costs.
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The company has been grappling with high fuel costs and foreign exchange volatility, which dragged it to losses in the two first two quarters of last fiscal year.
But, IndiGo swung to profits in the last two quarters, with the latest quarter’s earnings of 9.16 billion rupees (S$149.1 million) also getting a 2.53 billion rupees boost from forex gains.
It last posted two consecutive profitable quarters in the first half of 2019.
Going forward, IndiGo is expected to benefit from the turmoil at smaller rival Go First, which filed for bankruptcy earlier this month. But it also faces increased competition from new entrant Akasa Air and Tata Group, which took over Air India.
Smaller rival SpiceJet is yet to report results.
IndiGo’s shares closed down 1.6 per cent on Thursday, having reversed course after hitting a one-and-a-half year high. They have gained just under 13 per cent so far this year, while SpiceJet has fallen about 18 per cent. REUTERS
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