IndiGo’s parent company, InterGlobe Aviation on Friday reported its highest-ever net profit in the December quarter, helped by record revenues. A 10-fold jump in consolidated profits to Rs 1,420 crore was posted by the Delhi-based company, beating the Bloomberg estimate of Rs 1,275 crore.
Revenue from operations grew by 61% year-on-year to Rs 14,940 crore during the December quarter which is typically the best quarter for the aviation industry due to high leisure and holiday travel. There was a 26% rise in passengers flown during the quarter to 22.3 million.
The addition of 22 new aircraft during the quarter, taking the total to more than 300, in addition to an increase in passenger load to 85% from 80%, helped push margins.
Ebitdar (earnings before finance income and cost, tax, depreciation, amortization and aircraft, and engine rental) grew by 70% to Rs 3,399 crore while Ebitdar margin improved 1.3 points to 22.8%. Profits came on the back of a 77% jump in fuel expenses and a foreign exchange loss.
IndiGo’s cost of available seat kilometre (CASK), the unit cost for each seat for every kilometre, went up 18%, however, its revenue per available seat kilometre (RASK), the revenue each seat kilometre generated improved by 29%.
Pieter Elbers, CEO, InterGlobe Aviation said, “December has always been a strong quarter worldwide and not just India. The Indian aviation market is still below the pre-Covid levels but IndiGo is already higher than that level. We can expect the market to continue to grow significantly in order to catch up.”
The company is sitting on total cash of Rs 21,924 crore by the end of the December quarter whereas its total debt stood at Rs 44,475 crore in the same quarter.
The company’s chief financial officer added that bookings for the on-going quarter have been strong. “We are expecting to close the quarter operationally profitable but excluding foreign exchange,” said Gaurav Negi, CFO, InterGlobe Aviation.
A growth ‘north of mid-teens’ is expected in the fleet capacity of IndiGo next financial year. The airline had 14 owned/finance leased and 288 operating lease planes by the end of the December quarter. It has at least 500 aircraft on order from Airbus.
These new additions will help the company achieve its target of growing the international market better than the domestic market. Nairobi and Jakarta are among the list of international destinations that IndiGo aims to serve in FY24.
Tata Sons-owned Air India is reported to be finalising a mega deal for aircraft from Airbus and Boeing. This is expected to take the competitive intensity a notch higher in the domestic market where IndiGo has a 55% market share. Responding to a question, Elbers, however, said that the increased intensity is welcomed as it will help develop the domestic market.
“The fact that there is some consolidation in the Indian aviation landscape, the fact that the Tatas are taking initiative for the Indian aviation market is a good thing. This will further mature and develop the market. This will be a good thing for all the players. We at IndiGo continue to focus on what has been the success for us in the past 16 years to make sure we deliver on our customer promise in combination with cost leadership which remains the very essence of our profitability,” Elbers added.