Interglobe Aviation Ltd , the operator of India’s top airline, IndiGo, reported a second consecutive quarterly profit on Thursday, 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% more than the year-ago quarter and nearly 5% higher than the previous quarter. Its yield, a metric for profitability, rose 10.2% year-over-year to 4.85 rupees 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%.IndiGo’s available seat kilometres, or passenger carrying capacity, grew 49.2% year-on-year to 30.4 billion, more than its own forecast. It expects capacity to rise 5-7% sequentially in the current quarter.
IndiGo’s revenue grew 76.5% in the quarter, slightly outpacing the 74.3% jump in fuel costs.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 ($112 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 Ltd is yet to report results.
IndiGo’s shares closed down 1.6% on Thursday, having reversed course after hitting a one-and-a-half year high. They have gained just under 13% so far this year, while SpiceJet has fallen about 18%. ($1 = 81.7800 Indian rupees)