IndiGo parent posts Rs 1,062-crore loss on higher expenses

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Published: October 25, 2019 2:43 AM

The airline’s revenues were pushed up by better volumes — it carried 15.4% more domestic passengers in the September 2019 quarter — and better yields. The per passenger revenue stood at Rs 3.52/km in Q2FY20, up 9.4% y-o-y.

The airline commanded a domestic market share of 47.7% during Q2FY20 as compared to 42.4% a year ago.

Interglobe Aviation, which runs low-cost airline IndiGo, on Thursday reported higher-than-expected losses of `1,062 crore in the July-September period due to higher expenses.Analysts tracked by Bloomberg had estimated a `75-crore loss at the budget carrier in Q2FY20.
The current losses were up 63% year-on-year, compared to a Rs 651-crore loss in Q2FY19, when the airline was impacted by high fuel costs, rupee depreciation and intense competition leading to low fares.

Total expenses went up 27.6% y-o-y to Rs 9,571 crore during Q2FY20, with a weaker rupee increasing the lease liabilities and re-assessment of future maintenance costs in a seasonally weak quarter.

The costs related to aircraft repair and maintenance nearly doubled to Rs 153 crore, while depreciation and amortisation costs grew more than fivefold to `1,029 crore. Employee costs too increased 56% y-o-y to `1,206 crore as the airline inducted nearly 600 pilots and staff from the grounded Jet Airways.

Aviation turbine fuel costs, meanwhile, were higher by 2.6%, much lower than the 84% y-o-y increase a year earlier. While operating revenues jumped 31% y-o-y to Rs 8,105 crore, operating margins or the Ebitdar (earnings before interest, tax, depreciation, amortisation and rentals) was down 40 bps y-o-y to 3.2%.

The airline’s revenues were pushed up by better volumes — it carried 15.4% more domestic passengers in the September 2019 quarter — and better yields. The per passenger revenue stood at Rs 3.52/km in Q2FY20, up 9.4% y-o-y.

According to the analysts, average domestic fares were up 7-8% y-o-y during Q2FY20. IndiGo, which had a fleet of 245 aircraft at the end of September 2019, added seven new domestic routes and six international destinations during Q2FY19.

The airline has benefited from closure of Jet as it received more than 40 slots at the busy Delhi and Mumbai airports. According to the directorate general of civil aviation, domestic passenger traffic increased by 1.2% y-o-y in September. The airline commanded a domestic market share of 47.7% during Q2FY20 as compared to 42.4% a year ago.

It had a total cash balance of Rs 18,736 crore at the end of September 30, while its total debt at 19,841 crore. IndiGo’s shares closed Thursday’s session at Rs 1,666.35, up by 0.75%, on the Bombay Stock Exchange.

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