InterGlobe Aviation, the parent of IndiGo, on Friday reported a surprise profit at the consolidated level making it the best-ever September quarter in five years. The September quarter is supposed to the weakest in the aviation industry.
A steep rise in the number of passengers, better seat occupancy levels and lower fuel costs drove margins to one of the best levels for the reporting month. This was the fourth consecutive profitable quarter for IndiGo.
The market leader’s net profit stood at Rs 189 crore for the September quarter whereas it had posted a net loss of Rs 1,583 crore in the same quarter last year. A Bloomberg consensus put the net loss figure at Rs 316 crore for the reporting quarter.
Excluding the foreign exchange loss, which stood at Rs 617 crore, IndiGo’s profit would have been Rs 806 crore, the company stated.
The company’s consolidated revenue from operations for the September quarter stood at Rs 14,944 crore, a jump of 20% year-on-year (yoy). The Bloomberg estimate was Rs 14,885 crore.
EBITDAR (earnings before finance income and cost, tax, depreciation, amortization and aircraft, and engine rental) margin came in at 16.4% which was a huge jump compared to 1.8% clocked in the same quarter last year.
There was a 33% jump y-o-y in the number of passengers flown by IndiGo during the September quarter to 26.3 million. For the quarter, its passenger ticket revenues were Rs 13069 crore, an increase of 17.6% and ancillary revenues were Rs 1,551 crore, an increase of 21% compared to the same period last year.
Fuel costs, which made up 38% of the total cost for the company, declined 6.4% during the September quarter. The robust financial performance has boosted the company’s cash reserves by to Rs 30,665 crore, by the end of the September quarter.
IndiGo’s cost of available seat kilometre (CASK), the unit cost for each seat for every kilometre, went down by 27%, as well as its revenue per available seat kilometre (RASK), the revenue each seat kilometre generated, which was down by 7%.
IndiGo said that it received communication from engine provider Pratt & Whitney (P&W) with respect to power metal issues. A large number of incremental engines are being removed for shop visits between 2023 and 2026 and majority of these removals are planned for 2023 and early 2024.
“IndiGo’s current estimate indicates that these accelerated inspections and shop visits will further adversely impact our operating feet from Q4 onwards and will lead to higher number of groundings,” Gaurav Negi, CFO, InterGlobe Aviation said.
IndiGo already has a number of grounded aircraft which are in the ‘forties’, as per the company. It is in the process of executing lease agreements for 12 additional aircraft from the secondary market with deliveries expected from January 2024 onwards.
IndiGo’s fleet at 334 aircraft, which was a jump of 20% y-o-y, included 20 A320 CEOs, 176 A320 NEOs, 93 A321 NEOs, 41 ATRs, 2 A321 freighter and 2 B777 (damp lease); a net increase of 18 passenger aircraft during the quarter. It operated at a peak of 1,958 daily flights during the quarter including non-scheduled flights.
