IndiGo parent InterGlobe Aviation on Friday reported a surprise loss of Rs 987 crore at the consolidated level for the September quarter, weighed down by fuel expenses and growing aircraft rentals. This was the company’s first quarterly loss in two years.

The country’s biggest airline, controlling 63% of the domestic passenger traffic, had reported a net profit of Rs 189 crore for the same quarter last year. A Bloomberg estimate had pegged the Q2FY25 net profit at Rs 134 crore.

Fuel expenses, which made up over one-third of IndiGo’s total expenses, rose 13% year-on-year (y-o-y). Supplementary rentals and aircraft repair and maintenance costs, which contributed 15%, increased 30%.

Consolidated revenue from operations grew by 14% y-o-y to Rs 16,970 crore, but was lower than the Rs 17,254 crore estimated by Bloomberg. Earnings before interest, tax, depreciation, amortisation and rentals (Ebitdar) growth was marginal down by 1%, while Ebitdar margin was down 210 basis points at 14.3%.

In a post-results call, IndiGo CEO Pieter Elbers said, “Driven by the peak groundings of mid-70s and rising fuel costs, we reported a net loss. Our performance was impacted by seasonal trends and shifts.”

At the end of the September quarter, the company had a fleet strength of 410, up 7% compared to June end and up 23% compared to September 2023 end. While the company did not specify the number of grounded aircraft, it said it was in mid-70s.

“If not for the groundings, our financial performance would have been in line with the seasonality. In the last eight quarters, we have seen a consistent increase in the number of groundings. We have now turned the corner with the situation. The number of grounded aircraft has started to reduce,” Elbers said.

Chief financial officer Gaurav Negi said, “We have already passed the peak as far as the aircraft on the ground is concerned. Our current grounded aircraft has currently reduced to high-60s from the mid-70s level in Q1 and Q2. Based on the discussions with the OEMs, we are anticipating that the groundings will continue to moderate to a sub-60 level by the end of CY25, and in the 40s by the start of the next financial year.”

IndiGo is expecting a rebound in passenger traffic in the seasonally strong third quarter. It is aiming to add three international destinations before the end of this fiscal, taking the total number of international destinations to 40.

While the company had improved its cash holdings by 28% y-o-y to Rs 39,341 crore in the September quarter, total debt also increased by 20% to Rs 59,237 crore, including the capitalised operating lease liability of Rs 47,779 crore.

InterGlobe Aviation’s board approved an investment of up to Rs 295 crore for IndiGo Ventures Fund – I. The scheme will primarily invest in equity of startups at the pre-series A, Series A, and Series B stages. The focus will be on aviation and allied sectors. 

The investment amount will be drawn by the scheme, over the next 3-4 years, through multiple tranches. InterGlobe Aviation Ventures LLP, in capacity of sponsor to the scheme, will invest Rs 5 crore. The target corpus of the fund is up to Rs 300 crore with a greenshoe option of up to Rs 300 crore exercisable at the discretion of the investment manager.