IndiGo dips to 1st quarterly loss of `652 crore in 3 years
New Delhi: IndiGo's parent InterGlobe Aviation on Wednesday reported a loss of Rs 652.1 crore in the three months ended September as higher costs and intense competition took a toll on the bottom line. This is the first time that the carrier has posted a quarterly loss since getting listed in November 2015.
IndiGo, the country's largest airline with over 40 per cent market share, had a profit of Rs 551.6 crore in the year-ago period. According to a regulatory filing, IndiGo's total income rose over 18 per cent to Rs 6,514.2 crore in the second quarter ended September 2018.
In the same period a year ago, the total income stood at Rs 5,505.6 crore. "High fuel cost, rupee depreciation and intense competition significantly impacted profitability," the filing said.
In the latest quarter under review, total expenses jumped 58.2 per cent to Rs 7,502.3 crore. IndiGo's co-founder and interim CEO Rahul Bhatia said aviation in India is facing significant pressures from high fuel costs, rupee depreciation and intense competition, all of which have impacted the airline's profitability. "Despite this difficult environment, IndiGo remains well-positioned, thanks to our low cost structure and strong balance sheet," he noted.
Meanwhile, The much-anticipated direct flight between Vijayawada and Singapore may not take off this week as announced by the Andhra Pradesh government. The state government has recently said the Indigo A320 service will begin on October 25.
When contacted, Media advisor to the state Energy, Infrastructure and Investment Department A Chandrasekhar Reddy said "bookings will start" but the actual flight service might commence only in the first week of December. Indigo, which has been chosen by the state government to operate the twice-a-week (Tuesdays and Thursdays) direct flight, said it has not yet finalised the schedule.
We are yet to finalise the dates. We would keep you informed as and when we start these flight services, a spokesperson of Indigo said through an email. A top official of the AP Airports Development Corporation Limited said the winter schedule would kick-in after October 25 and many more time-consuming formalities may be required to be completed prior to the flight, indicating that the service might be delayed.
Chief Minister N Chandrababu Naidu has been very keen on launching a direct flight to Singapore from the state capital Amaravati. The state government came forward to extend viability gap funding (VGF) to launch international flights from Vijayawada airport that falls under the state capital territory.
Airlines participating in the Centre's regional air connectivity scheme UDAN are extended VGF — which is shared by the respective state government and the Centre — as well as certain other incentives. The AP Airports Development Corporation Limited had invited bids from airline operators and Indigo, the sole bidder, was given approval on September 10 to operate the service with a VGF of Rs 18.35 crore for six months.