IndiGo Quarterly Profit Slides 12 Pc to Rs 2,729 Crore on Higher Expenses

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.

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.