IndiGo, India's largest airline operated by InterGlobe Aviation Ltd., has sought support of its employees against the backdrop of its biggest quarterly loss since listing.
Net loss of the operator of India's largest airline widened to Rs 1,062 crore in the September quarter of 2019-20 from Rs 652 crore a year ago. Analyst estimates compiled by BloombergQuint had pegged the loss at Rs 42 crore.
“We will be dealing with the weakening revenue environment with a sharper focus on cost, for which we seek your support. Operationally, we should continue our focus on safety, our on-time performance and on delivering a courteous, hassle-free service,” IndiGo Chief Executive Officer Ronojoy Dutta said in a communication to employees.
Dutta, however, said that the carrier has a “very strong” balance sheet, which allows it to remain committed to the growth strategy and expansion. The order for 300 Airbus aircraft announced Tuesday is part of these plans, he added.
Citing accounting issues as the reason for the record loss, Dutta said that the airline was estimating a reasonable financial performance with an expected 5.7 percent growth in unit revenue and unit costs better by around 1.5 percent.
Also Read: IndiGo Expects No Growth In Q3 As Slowdown Hurts; Capacity Expansion Slows
“But then we had to deal with two accounting issues. As a result of these accounting adjustments, our reported unit revenue performance was not affected and remained strong at 5.7 percent increase but our unit costs instead of being better by 1.5 percent, now had a reported worsening of 2.8 per cent,” the IndiGo CEO said.
The July-September period is always a weak one for the aviation sector, he added.
On Tuesday, IndiGo shares fell 3.03 percent to Rs 1,410.30 apiece on the BSE while the benchmark Sensex gained 1.48 percent to end the day at 39,831.84 points.
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