IndiGo parent firm's Q1 profit crashes by 97% on forex loss, high fuel prices
Mumbai: InterGlobe Aviation, which runs largest domestic carrier IndiGo, on Monday reported a 96.6 per cent fall in net profit to Rs 27.8 crore in June quarter, owing to adverse impact of foreign exchange, high fuel prices, lower yields and higher maintenance cost. The Gurugram-based budget carrier had posted a net profit of Rs 811.10 crore in the same quarter last year.
However, sales from operations rose 13.2 per cent to Rs 651.20 crore in the quarter, compared with Rs 575.29 crore in the year-ago period. For the quarter, the passenger ticket revenues stood at Rs 576.94 crore, an increase of 13.6 per cent over the year-ago period, and ancillary revenues rose 16 per cent to Rs 68.27 crore.
"The profit during the quarter was primarily impacted by rupee depreciation, increase in fuel prices, continuous pressure on yields and increase in maintenance cost," said Rahul Bhatia, co-founder and interim CEO, IndiGo, during the post-earnings analysts call.
Total expenses for the quarter jumped 40.5 per cent year-on-year to Rs 678.70 crore, while fuel cost shot up by 54.5 per cent to 271.56 crore, from Rs 175.92 crore in the year-ago period. Yields or average ticket price dropped 5.4 per cent to Rs 3.62 per km in the June quarter, against Rs 3.83 per km in the same period last year.
"The current revenue environment continues to remain weak, particularly in the 0-15 days booking window. The fares continue to be lowest in the quarter compared to the same period last year. We don't believe that these type of fares are sustainable, especially given increase in input costs."
The load factor surged 1.3 per cent to 89.3 per cent in the quarter, against 88 per cent in the year-ago period. "Clearly, with the industry load factor in the high 80-90 per cent range, the industry is turning with passenger demand at the current fare levels, but we have no choice but to keep our fares competitive," he added.
During the quarter, IndiGo added two new destinations - Hubli, the first destination under the Udan scheme, and Trichy - besides staring nine new routes. This brought the number of total destination to 52, including eight abroad.
"While we remain focused on building our domestic network, we are also opening up new destinations in India and internationally. With our existing fleet and new A320 Neos that we expect to start getting towards the end of the year, IndiGo will have the capacity to reach cities in China, the middle-east and South-east Asia."