IndiGo’s profit surges 53% as India air travel demand grows

INDIGO, India’s biggest airline, reported a profit for a fifth straight quarter as the budget carrier captured a higher share of passenger traffic during the period.

Net income rose 53 per cent to 30 billion rupees (S$488 million) in the three months to Dec 31, IndiGo said in a stock exchange filing on Friday (Feb 2). The airline exceeded Bloomberg’s consensus estimate of 21.3 billion rupees.

Revenue for the third quarter beat estimates at 194.5 billion rupees, 30 per cent above year-earlier levels. Fuel costs rose 18 per cent. Its seat capacity rose 26.8 per cent during the period.

IndiGo is ramping up capacity to seize a bigger chunk of what is one of the world’s fastest-growing aviation markets. Its already large share, currently at 62 per cent, has been growing considering rival SpiceJet is struggling financially, while another budget carrier – Go Airlines – filed for insolvency and stopped operations in May.

IndiGo last year made a 500-plane purchase from Airbus, a move that could help protect its position from an expanding Air India.

IndiGo’s out of service aircraft have increased to “mid-70s” from 40 in the previous quarter due to required inspections of Pratt & Whitney GTF engines, chief financial officer Gaurav Negi said on an earnings call. The carrier will rely on wet leasing aircraft to prevent a capacity shortage, he said.

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Still, it’s aiming to increase seat capacity by 12 per cent in the fourth quarter, compared with the year before.

The carrier flew 24.3 million passengers from October to December, 23 per cent higher than the year before, according to the country’s aviation regulator. BLOOMBERG