The operator of India’s largest airline reported a surprise loss in the first quarter even as travel demand recovered.
InterGlobe Aviation Ltd, the parent of IndiGo, reported a net loss worth Rs 1,064 crore in the quarter ended June against a net loss of Rs 1,680 crore in the preceding three months and a loss of Rs 3,179 crore a year ago, according to its exchange filing. That’s the second straight quarter of losses.
A consensus estimate of analysts tracked by Bloomberg had forecasted a net profit of Rs 1,694 crore for the first quarter.
High aviation turbine fuel prices and a depreciating rupee hurt the prospects of IndiGo—with nearly 60% market share—turning profitable. That’s because costs for maintenance and repair are borne outside of the country and are paid in foreign currencies.
Excluding a foreign currency loss of Rs 1,425 crore, net profit for the quarter aggregated to Rs 360 crore, the company said in a press release.
The fuel cost jumped 86% over the preceding quarter to Rs 599 crore. Total costs witnessed a rise of 42.5% during the same period.
Yields, a measure of average fare per passenger per kilometer, rose to Rs 5.24 a km from Rs 4.40 in the preceding quarter.
IndiGo Q1 FY23 Highlights (QoQ):
Revenue rose 60% to Rs 12,855 crore, against the Rs 15,338-crore forecast.
Ebitdar stood at Rs 717 crore versus Rs 172 crore.
Ebitdar margin stood at 5.6% compared with 2.1%.
The aviation sector was one of the worst-hit by the Covid-19 pandemic as first a nationwide lockdown and then local curbs to contain the spread of the virus ravaged travel.
IndiGo, after reporting net profit for the first time in two years in October-December 2021 quarter, slipped back into losses in Q4 FY22 as the emergence of the highly-transmissible Omicron variant upended a nascent recovery.
“While our financial performance in the second quarter will be challenged by weak seasonality, the long-term revenue trend remains strong,” Ronojoy Dutta, the airline’s outgoing chief executive officer, said in a statement.
Shares of IndiGo’s parent ended 1.2% higher before the results were announced compared with a 0.3% rise in the benchmark Nifty 50.