New Delhi, Jul 26 (PTI) The country’s largest airline IndiGo on Friday reported a nearly 12 per cent fall in profit after tax to Rs 2,728.8 crore for the three months ended June as higher fuel and other expenses took a toll on the bottom line.
The budget carrier, which is set to complete 18 years of flying and introduce business class seats, said network expansion, including the addition of new destinations, will continue but flagged a higher inflationary environment.
While the total income shot up 18 per cent to Rs 20,248.9 crore in the first quarter of the current financial year, the overall expenses, mainly driven by higher fuel costs, jumped 24 per cent to Rs 17,444.9 crore.
In the 2023 June quarter, IndiGo’s parent InterGlobe Aviation had a profit after tax of Rs 3,090.6 crore.
Excluding the impact of foreign exchange, the carrier’s profit after tax in the latest June quarter was Rs 2,786.3 crore, according to a release.
The total income in the year-ago period stood at Rs 17,160.9 crore.
The airline’s total expenses surged 24 per cent to Rs 17,444.9 crore, with fuel costs rising 22.7 per cent to Rs 6,416.5 crore in the three months ended June 2024.
In the same period a year ago, total expenses were Rs 14.070.2 crore.
According to the company, aircraft and engine rentals also went up to Rs 624.1 crore in the latest June quarter from Rs 194.6 crore in the year-ago period.
The load factor, which refers to seat occupancy in a flight, dropped to 86.7 per cent in the quarter under review from 88.6 per cent in the same period a year ago.
During an analysts call to discuss the latest quarterly results, IndiGo CEO Pieter Elbers said the airline has now been profitable for seven straight quarters, and that network expansion is a key part of its strategy.
IndiGo Chief Financial Officer Gaurav Negi said there is an escalation in fuel prices as some states have started increasing the Value Added Tax (VAT) on jet fuel.
Airport charges have also started to climb upwards, and the airline is monitoring it as well as having discussions with airport partners. Further, maintenance works are going through a bit of an inflationary cycle, he said during an analysts’ call to discuss the latest quarterly results.
“Currently, we are experiencing a higher inflationary environment… it is across the board we are experiencing, nonetheless, we are looking at ways on how to control the costs,” Negi said and added that an increase in capacity is helping offset higher costs.
For the current fiscal ending March 2025, the airline has a capacity guidance of early double digits, and for the second quarter, the capacity addition is anticipated to be in the high single digits.
It has a domestic market share of nearly 61 per cent and around 975 planes on order. At the end of June, the airline had 382 planes, including 18 aircraft on wet lease.
Among others, the airline plans to induct six aircraft from Qatar Airways on damp lease in the coming quarters, subject to regulatory approvals.
Meanwhile, Negi said the grounded aircraft is in the mid-70s and expects the grounding to reduce towards the start of next year.
The airline has grounded planes due to the Pratt & Whitney (P&W) engine woes, and as part of mitigating measures, it has also taken planes on wet lease.
“We are working with P&W towards constant supply of spare engines, and basis the current estimates, we expect the grounding to start reducing towards the start of next year,” Negi said.
In the June quarter, IndiGo finalised an amendment to the existing agreement with P&W for customised compensation in relation to the grounding of aircraft due to spare engine unavailability.
Elbers also said IndiGo will be getting A321 XLR aircraft next year, and that will allow the airline to reach the Southern parts of Europe.
Shares of the company gained 1.37 per cent to close at Rs 4,491.25 apiece on the BSE. PTI RAM BAL BAL
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