IndiGo Q1 Review - Strong Yields, But Sustainability Is A Concern: Motilal Oswal

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The logo of IndiGo airlines is pictured on an aircraft. (Photo: Regis Duvignau/Reuters)

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Motilal Oswal Report

Interglobe Aviation Ltd. reported an in line adjusted loss at Rs 10.6 billion, led by better than estimated yield (at Rs 5.2), with an in line revenue passenger kilometers.

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A lower passenger load factor (at 79.6%), due to modest demand, has kept revenue per available seat-kilometer under check (up 19% QoQ) in Q1 FY23.

IndiGo said its international flight operations in Q1 FY23 stood at pre-Covid levels. It expects the same to grow in coming months with the easing of international travel protocols.

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According to our airfare tracker, the 30-day domestic forward prices dipped sharply (down 7% month-on-month) in August 2022. The 15-day domestic forward prices also dipped by 8% month-on-month due to additional capacity and a decline in aviation turbine fuel prices.

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