- India’s largest airline IndiGo announced a net loss of some Rs. 870 crores with a 30 percent increase over last year’s same quarter.
- Total revenue from the company increased by 5.3 percent to about 8,299 crores at the same time last year compared to about 7,883.
For the fourth quarter ended March 31, InterGlobe Aviation, India’s largest airline IndiGo announced a net loss of some 870 crores. Its costs also continue to weigh heavily with a 30 percent increase over last year’s same quarter.
Total revenue from the company increased by 5.3 percent to about 8,299 crores at the same time last year compared to about 7,883.
“Flight closure during national shutdown due to COVID-19 dramatically affected sales for the quarter,” the company said in a statement.
The airline reported a 30 percent increase in expenses during the fourth quarter and a 42.1 percent increase in the cost per available seat kilometer (CASK) — excluding fuel. The weakening of the rupee has compounded the strain.
According to the Directorate-General for Civil Aviation (DGCA), India’s domestic air passenger traffic crashed year-on-year by more than 33 percent in March after the government announced a national lockdown to deal with the COVID-19 pandemic and airlines to halt domestic operations — a week after it announced an international flights ban.
The ban did not extend to cargo flights, however, but the airlines faced a big cash shortage because a significant chunk of revenue comes from passenger flights. For the same duration of the previous year, fewer than 77.62 lakh passengers flew in March as against 1.15 crore. In which IndiGo has a market share of 40 percent. In 2019 Indigo flew some 43 million passengers.
Since the beginning of 2020, the share price of Indigo has taken on a huge hit as in times of coronavirus pandemic people were avoiding unessential travel. In the fourth quarter, the company announced that basic earnings per share dropped by ₹22.63
Since the start of the fourth quarter to date, the share price has fallen by over 27.51 percent. On May 13, however, the stock recovered more than 3 percent. The stellar rally in airline inventories was caused by the decision of the Indian government to resume domestic flights from May 25.
Unlike other airlines, the company tried hard in March and April to refrain from pay cuts following Prime Minister Narendra Modi ‘s call not to slash wages for the people they hire. But, buried under the losses, this month ‘s largest domestic airline company in the country announced pay cuts ranging from 5 to 25 percent.