Private airline IndiGo’s net profit crashes by 7.4% to Rs 591.77 cr
InterGlobe Aviation Ltd, which owns budget carrier IndiGo, on Monday reported around 7.4 per cent decline in net profit at Rs 591.77 crore for the second quarter ended June saying it was due to competitive ticket pricing. The company had posted a net profit of Rs 638.89 crore in the same period last fiscal. Total revenue during the April-June quarter of the current fiscal rose 9.7 per cent to Rs 4,741.45 crore as compared to Rs 4,211.54 crore in Q1FY16, IndiGo said in a release.
“Profitability was lower than last year primarily because of competitive fare pressures. We have reduced our debt by Rs 458.9 crore during the quarter,” IndiGo President and Whole-time Director Aditya Ghosh said. In the quarter ended June 30, the Gurgaon-based budget carrier reported a 6.9 per cent increase in passenger revenue at Rs 3971.73 crore while ancillary revenues spiked 20.8 per cent at Rs 580.57 crore as compared to Q1FY16.
The seat occupancy during the April-June quarter of the current fiscal declined 4.7 per cent to 83.3 per cent compared to 88.0 per cent in the same period last fiscal. The airline’s total debt reduced to Rs 2785.7 crore on June 30, from Rs 3244.6 crore on March 31, primarily due to retirement of debt of three aircraft on finance lease, according to the release.
“The entire debt for IndiGo is aircraft related and the airline does not have any working capital debt,” it said. Meanwhile, to tighten the purse strings further, national carrier Air India has barred its officials from using luxury cabs while travelling within the country and asked them to put up only in crew hotels.
In a strongly-worded circular to “all concerned” on Saturday last, Air India Chairman and Managing Director Ashwani Lohani warned the officials of serious action in case of any violation of his instructions on austerity measures.
“I have been repeatedly emphasising on economy, curbing of wasteful expenditure and maintaining immaculate conduct and behaviour,” he said. Recalling that several instructions regarding official travel have been issued in the past, Lohani said, “Full time taxi shall not be hired for any officer (except CMD) while travelling in an overseas country.” “If any officer has to cover many points in a day that otherwise would be uncomfortable, to cover by point-to-point taxies, written prior approval need to be taken,” according to the circular.
The circular came soon after the PMO asked the airline to improve its performance on all fronts during the first official review late last month. According to the circular, taxies hired for domestic travel should not be luxury vehicles while “crew hotels being fairly reasonable, officials shall invariably stay in the hotels only during official travel both within India and overseas.”