- IndiGo reported a 400% increase in its profit to Rs. 589 crore.
- IndiGo flew 15.7 million domestic passengers during the March quarter compared to 13.4 million in the year-ago period.
- Indigo’s yield increased by 12% to Rs 3.70 per km in the March quarter against Rs 3.31 per km a year ago.
Indigo Q4 comparison shows high margins. source: economictimes
InterGlobe Aviation, the operator of low-cost carrier IndiGo, reported a 400% increase in its profit to Rs. 589 crore for the quarter ended March 31, making it the most profitable period of the financial year 2019 for the airline partly due to the suspension of flight operations by Jet Airways.
Analysts had expected the airline to report strong numbers as rival Jet Airways had to ground flights during the period, leading to a spike in fares. The quarter saw its fuel cost rising 19 percent to Rs 2,781.3 crore from Rs 2,338 crore in the year-ago period. Its cost per available seat kilometers rose almost 6.7 percent.
The low-cost carrier said its annual net profit for 2018-19 stood at Rs 156.1 crore, 93 percent less than Rs 2,242.4 crore for the 2017-18 financial year.
aviation stock: how Indigo performed. source: capitaline
During the financial year 2019, the airline was able to increase its domestic capacity by 24% and capacity on international routes by 60%.
Key points for the airline are:
- Indigo, with a fleet of 217 aircraft, will be adding 53 Airbus A320s and A321s as well as almost 11 ATRs in the current financial year.
- IndiGo’s revenue during the quarter grew 35.9% year-on-year to Rs 7,883.3 crore.
- IndiGo flew 15.7 million domestic passengers during the March quarter compared to 13.4 million in the year-ago period.
- IndiGo’s yield, which measures the average fare per passenger per kilometer, increased by 12% to Rs 3.70 per km in the March quarter against Rs 3.31 per km a year ago.
- Total expenses for the quarter jumped 28.9% year-on-year to Rs 7,643 crore. Of this, fuel cost stood at Rs 2,781.3 crore, up 19% year-on-year.
- For full fiscal 2018-19, profit fell 93% to Rs 156.1 crore, but revenue increased 23.8% to Rs 28,496.8 crore.
- InterGlobe in its statement said that it has a very strong balance sheet with total cash counting to Rs 15,308.1 crore, including free cash of Rs 6,079.6 crore. Total debt as of March 2019 was Rs 2,429.2 crore, the airline added.
- The company announced it will pay a dividend of Rs 5 per share.
interglobe stock results. source: business standard
With Jet Airways shutting down, both IndiGo and SpiceJet have been looking to capitalize, vying for the airport slots left by Jet. They have also been expanding their fleet aggressively while adding several new routes.
In the earning’s call, IndiGo CEO Ronojoy Dutta said that Jet Airways suspending its operations helped IndiGo in the month of February and March and that a total of 285 former Jet Airways’ pilots joined the airline. This helped the company overcome the pilot shortfall that it was facing.
However, for the entire fiscal 2018-19, IndiGo’s net profit declined 93 percent to Rs 156.1 crore, from Rs 2,242.4 crore in the 2017-18.
indigo-nifty-graph-Q4-via-bloomberquint
“The fiscal year 2019 was a tough year for the whole airline industry in India thanks to high fuel prices, weak rupee value and intensely competitive environment,” Ronojoy said in a statement.
“However, it remains a tale of two halves for IndiGo, with the first half year incurring losses and the second half of the year watching a sharp recovery. We are seeing plenty of opportunities for profitable growth in our network and with a robust delivery web of new aircraft, we are very well positioned to capitalize this growth.”
According to an Icra note, the increase in airfares because of the demand-supply imbalance created by the grounding of Jet impacted the passenger load factors of airlines.
During the fourth quarter, the load factor at IndiGo was 86 percent, a drop of three percent over the year-ago period.
To a question on whether the airline would further diversify its fleet by adding wide-body aircraft, the CEO said, “There is nothing imminent. Are we studying it? Absolutely. But are we about to place an order or do we see something happening in the near future? No.”
He also said the rift between IndiGo’s partners Rahul Bhatia and Rakesh Gangwal over “one issue” would be resolved soon.
Let’s hope for the same.
