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HomeUncategorizedInterGlobe Aviation reports seventh successive quarterly loss

InterGlobe Aviation reports seventh successive quarterly loss


InterGlobe Aviation Ltd, the parent of India’s top domestic airline IndiGo, posted its seventh consecutive quarterly loss during the three-month period ending on 30 September, driven by a rise in fuel and fixed costs.

The airline company’s consolidated net loss of ₹1,436.50 crore during the quarter, widened from ₹1,194.83 crore losses reported during the same period of the previous year.

Fuel costs rose by 207.8% annually to ₹1,989.40 crore during the recently concluded quarter.  

Expenses on supplementary rentals and aircraft repair and maintenance rose 73.6% annually to ₹1,462.02 crore during the quarter.

Consolidated net revenue, however, rose by 91.4% to ₹5,798.73 crore during the September quarter, as compared to the year ago period.

This was driven by a 104.6% rise in the company’s revenue from operations, which stood at ₹5608.50 crore during the quarter.

While the revenue exceeded analyst expectations the losses were wider than expected. A Bloomberg poll of six brokers had estimated a net consolidated loss of ₹1,303.20 crore, and five forecast the carrier to report a consolidated revenue of ₹5,374.90 crore in the September quarter.

“We are encouraged by the pace of revenue recovery. We continue to work towards return to profitability in order to strengthen our balance sheet,” said IndiGo’s chief executive officer Ronojoy Dutta in a statement to the stock exchanges.

“With a modern fleet, dedicated employees and a stronger economic environment we are well positioned to leverage all the growth opportunities around us,” Dutta added in the statement.

Airlines were allowed to operate about 60% of their pre-covid capacity during September 2020, compared to 85% during September 2021, after air travel was resumed following a government-imposed ban to contain the covid-19 pandemic between March and May 2020.

However, the government has since October removed the cap on capacity.

The daily (air ticket) bookings during October have reached levels seen during January 2020, IndiGo’s Dutta told analysts during a post results call.

“It is time for repair and healing (after reporting consecutive quarterly losses),” he said adding that the aviation sector is gradually getting out of the covid-19 pandemic related crisis.

The airline’s plan going ahead will be to keep its costs down while adding more capacity (flights) into the market, Dutta added.

Indian airlines are likely to register a consolidated loss of about $4.1 billion during financial year 2022 (FY 2022), similar to the losses clocked during FY2021, due to the covid-19 pandemic, aviation consultancy firm Capa India said in a June report.

 As a result, airlines are expected to need close to $5 billion of recapitalization in FY2022 just to survive, after registering a $8 billion loss over the last two years, Capa said in its FY2022 Airline Outlook said.

At the end of the quarter ending on 30 September 2021, IndiGo had a total cash balance of ₹16,553.90 crore, comprising ₹6,351.6 crore of free cash and ₹10,202.3 crore of restricted cash.

The company’s total debt (including the capitalized operating lease liability) stood at ₹32,335.3 crore at the end of the recently concluded quarter.

IndiGo’s fleet stood at 279 aircraft including 72 A320 CEOs, 130 A320 NEOs, 44 A321 NEOs and 33 ATRs, as of 30 September. It operated between 759 and 1,209 daily flights connecting 69 domestic and several international destinations during the quarter.

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