IndiGo reports a multi-fold surge in net profit to INR 1,422 crore in Q3

Aviation major IndiGo on Friday, February 3 reported multi-fold surge in net profit to INR 1,422 crore for the three months ended December. The profit rose over 1,000%, compared with INR 129 crore in the last-year period. Revenue from operations surged 61% to INR 14,932 crore in the third quarter as against INR 9294 crore a year ago.

The massive bottomline growth was driven by low base of last year, mainly due the impact of the pandemic. The company had posted a loss of INR 1,583 crore in previous September quarter.

The airlines sector was battered by the pandemic like any other, but it was among the last ones to recover from the after-effects of Covid. As economies opened and air travel demands recovered, companies' performances improved.

“Third quarter performance was strong both operationally and financially against the backdrop of robust demand for air travel. The wide range of initiatives that were set in motion across the organization have started to yield results. I am proud to report the highest-ever quarterly revenue of 154.1 billion rupees and robust profit of 14.2 billion rupees for the third quarter of fiscal year 2023.

We are thankful to our customers and all IndiGo employees who enabled us to achieve this performance. With a modern fleet of over 300 aircraft, we continue to serve the market with further capacity growth planned across domestic and international sectors."

Pieter Elbers, CEO, IndiGo

For the December quarter, IndiGo's passenger ticket revenues were INR 13,162 crore, an increase of 63% and ancillary revenues rose 25% to INR 1,422 crore compared to the same period last year.

The Gurugram-based company's EBITDAR (earnings before interest, tax, depreciation, amortisation and Rent) surged 70% to INR 3,399 crore for the December quarter. It was INR 1,995 crore in the same period last year.

Operationally, the airline's capacity increased by 25%, while passenger numbers rose 26% to 22.3 million. On the other hand, yield improved by 21.9% to INR 5.38 during the quarter under review and load factor advanced 5.4 points to 85.1% Fuel costs jumped 77% to INR 5,785 crore in the three months ended December.

IndiGo had a total cash balance of INR 21,924 crore, of which INR 10,612 crore is free cash and INR 11,312 crore is restricted cash.

In a reflection of strong travel demand, the budget carrier carried 2.23 crore passengers in the third quarter, an increase of nearly 26% compared with the same period a year ago when it stood at 1.78 crore.

The load factor, a measure of seat occupancy, rose to 85.1% against 79.7% in the year-ago period. The airline had a domestic market share of 55.7% in the December quarter.

The airline has a fleet of 302 aircraft, including 23 A320 CEOs, 160 A320 NEOs, 78 A321 NEOs, 39 ATRs and 2 A321 freighters as of December, a net increase of 22 passenger and 1 freighter aircraft in the third quarter.

The airline took delivery of 11 A320neos, 10 A321neos, four ATR 72-600s, and one A321 freighter in the previous quarter, while returning three A320ceos. The A320neos which were scheduled for return have been re-inducted to tide over the crunch due to delays in getting the grounded aircraft back in air.

It operated a peak of 1,685 daily flights during the quarter including non-scheduled flights. The airline’s network spanned across 75 domestic and 22 international destinations in Q3.

IndiGo reported capacity in terms of available seat kilometer (ASKs) growth at 28.8% in the third quarter and it expects fourth quarter ASKs to increase by around 45% year-on-year. On Friday, February 3 ahead of the results, IndiGo stock closed 1.17% lower at INR 2,100 apiece on the NSE.

Eight accidents involving planes of Flying Training Organisations (FTOs) happened in 2022 and an investigation related to one accident has been completed so far, according to the government.

At present, there are 35 Flying Training Organisations (FTOs) operating at 53 bases as approved by the Directorate General of Civil Aviation (DGCA).

ALSO READ - DGCA boosts monitoring of Flying Training Organisations to increase safety

8 accidents of trainer aircraft of FTOs happened in 2022

In a written reply in the Lok Sabha on Thursday, February 2, Minister of State for Civil Aviation V K Singh said there were a total of eight accidents in 2022 involving FTO aircraft. Probe into the accidents is carried out by the Aircraft Accident Investigation Bureau (AAIB).

As per data provided by the minister, the investigation into the accident at Jakkur Aerodrome in Bengaluru that happened on April 21, 2022, has been completed. A Cessna 185 plane was involved and the operator was Agni Aero Sports Adventure Academy (P) Ltd.

ALSO READ - DGCA reviews 30 flying training organisations; suspends certified flight instructors

Singh, in another written reply, said in June 2022, six FTO slots were awarded by the Airports Authority of India (AAI) at five airports -- Bhavnagar (Gujarat), Hubballi (Karnataka), Kadappa (Andhra Pradesh), Kishangarh (Rajasthan) and Salem (Tamil Nadu).

In 2021, AAI awarded nine FTO slots at five airports at Belagavi (Karnataka), Jalgaon (Maharashtra), Kalaburagi (Karnataka), Khajuraho (Madhya Pradesh) and Lilabari (Assam). These slots were awarded after a competitive bidding process.

ALSO READ - DGCA issues the highest number of Commercial Pilot Licenses in 2022 in the last decade

The minister also said there is no shortage of pilots in the country and as many as 1,165 Commercial Pilot Licenses (CPLs) were issued by the DGCA last year.

Indian aviation industry suffered a loss of over INR 24,000 crore in the last two financial years during 2020-22. As per the Union Ministry of Civil Aviation, the industry in FY 2020-21 suffered a loss of INR 12,479 crore and in FY 2021-22 it was INR 11,658 crore.

In a reply at the Lok Sabha on Thursday, February 2, the Ministry said the Centre has taken various initiatives to support the aviation industry.

The reduction in Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) was taken up with state governments and union territories levying high VAT on ATF. As a result, VAT on ATF has been reduced by 17 states and UTs.

Indian aviation industry suffered a loss of INR 24,000 crore in 2020-22

The reply said that the Goods and Services Tax (GST) rate has been reduced from 18% to 5% for domestic Maintenance, Repair and Overhaul (MRO) services.

The Ministry further informed that the Airports Authority of India (AAI) and other airport developers have targeted a capital outlay of approximately INR 98,000 crore in the next five years for expansion and modification of new and existing terminals as well as the strengthening of runways, among other activities.

The Centre has also approved the Emergency Credit Line Guarantee Scheme (ECLGS) for the aviation sector, according to the Ministry.

Based on the industry demand, the scope of ECLGS has been enhanced to provide credit support to these companies up to 100% of their total credit outstanding (both fund based and non-fund-based outstanding) as on reference dates, subject to a cap of INR 1,500 crore per borrower, whichever is lower.

The goods and Services Tax (GST) rate has been reduced from 18% to 5% for domestic Maintenance, Repair and Overhaul (MRO) services.

Meanwhile, the allocation to the aviation sector in the Union Budget FY23-24, which was presented by Finance Minister Nirmala Sitharaman, more than halved to INR 3,113.36 crore. Of this, INR 3,026.70 crore is for revenue and INR 86.66 crore is for capital.

ALSO READ - Civil Aviation Ministry allocated INR 3,113.36 crore in Budget 2023-24; 50 airports, heliports to be revived

The Finance Minister also announced the setting up of 50 new airports, and water aerodromes and revive advanced landing gears to improve regional air connectivity. The government has also announced plans to develop 50 tourist destinations and sector-specific skilling and entrepreneurship development schemes such as the Swadesh Darshan Scheme. 

Rating agency ICRA says the allocation to the aviation sector in the budget is aimed at boosting domestic tourism and travel. "The Union Budget for FY2023-24 has reiterated its focus on improving regional air connectivity through setting up of 50 additional airports, heliports, water aerodromes and revival of advance landing grounds, which will boost domestic air travel," it says. 

An Air India Express flight from Abu Dhabi to Kerala's Kozhikode (or Calicut) was forced to return shortly after taking off because of a 'flameout' in the No. 1 engine while the plane was climbing.

National regulator Directorate General of Civil Aviation told news agency ANI the plane was a Boeing 737-800 and that it was 'involved in (an) airturnback'.

"Today (Feb 3) an Air India Express B737-800... operating flight IX 348 (Abu Dhabi-Calicut) was involved in (an) airturnback due to No 1 engine flameout at 1,000 ft during climb."

The airline told ANI the plane managed to land and that all on board are safe.

According to flight-tracking website Flightradar24, the flight took off at 9.59 pm UTC (3.29 am IST) and landed less than 45 minutes later.

The plane reached a max altitude of 1,975 feet.

Earlier this month another AI Express flight - from Trivandrum to Muscat - was forced to land, less than 45 minutes after taking off, due to a technical error.

Officials told ANI of a problem with the FMS, or flight management system.

President Joe Biden’s administration has promised to fast-track the approval the General Electric Company of the United States sought to produce in India the engines to power the combat aircraft manufactured by Hindustan Aeronautics Limited.

The Biden Administration also agreed to work with the American Congress to lower the barriers for the export of High-Performance Computing technology and source code from the US to India.

The White House confirmed that the United States government had received “an application from General Electric to jointly produce jet engines that could power jet aircraft operated and produced indigenously by India”.

“The United States commits to an expeditious review of this application,” it added in a fact sheet issued after a meeting between Biden’s National Security Adviser Jake Sullivan and his counterpart in the Government of India, Ajit Doval, in Washington DC late Tuesday.

The GE is likely to collaborate with the Defence Research and Development Organization (DRDO) of the Government of India and another manufacturer in India to produce the F414-INS6 engines for the TEJAS MK-2, which would be developed by the HAL to replace the Mirage-2000, the Jaguar and the MiG 29 fighter jets of the Indian Air Force (IAF) fleet. The GE may transfer technologies to allow the production of several key components of the engine in India, according to a source aware of the discussion between New Delhi and Washington DC on bilateral defence technology cooperation.

Sullivan told journalists after his meeting with Doval in Washington DC that both sides would strive for “fast and ambitious progress” on setting the stage for the US company manufacturing jet engines in India.

The two sides also agreed to develop a new bilateral Defence Industrial Cooperation Roadmap to accelerate technological cooperation between both countries for joint development and production, not only of jet engines but also of munitions and other systems. They agreed to enhance long-term research and development cooperation, with a focus on identifying maritime security and intelligence surveillance reconnaissance operational use cases.

They will launch a new “Innovation Bridge” that would connect the defence start-ups of India and the US.

Doval, Prime Minister Narendra Modi’s National Security adviser (NSA), is currently on a tour to Washington DC. He and his counterpart, Sullivan, on Tuesday led the first dialogue within the framework of the US-India initiative on Critical and Emerging Technology (iCET), which was announced by Modi and Biden during a meeting in Tokyo in May 2022.

The Biden Administration agreed to launch the new initiative after New Delhi had repeatedly pointed out that India had to rely more on Russia only because the US and the other western nations had in the past declined to share with it advanced military hardware and critical technologies. The Modi Government had put forward the argument in response to criticism over its refusal to join the US and the rest of the West in criticising Russia for its military aggression against Ukraine.

Geopolitical factors like China’s aggression against its disputed boundary with India, its belligerence against other nations in the Indo-Pacific region and its growing strategic synergy with Russia in the wake of President Vladimir Putin’s war against Ukraine played a key role in prompting India and the US to agree to foster an open, accessible and secure technology ecosystem, based on mutual trust and confidence, reinforcement of democratic values and democratic institutions.

“The China-Russia factors are real, but so is the idea of building a deep, democratic ecosystem of high technology (between India and the US,” Sullivan said, adding: “So, geopolitics doesn’t sit off to the side, but it’s not a comprehensive explanation for what’s at work here.”

The meeting between Doval and Sullivan saw India and the US underlining “their commitment to working to resolve issues related to regulatory barriers and business and talent mobility in both countries through a standing mechanism under iCET”.

The two sides also agreed on signing a new Implementation Arrangement for a Research Agency Partnership between the National Science Foundation of the US and the science agencies of India to expand international collaboration in a range of areas — including artificial intelligence, quantum technologies, and advanced wireless — to build a robust innovation ecosystem between our countries. They also agreed on establishing a joint India-US Quantum Coordination Mechanism with participation from industry, academia, and government to facilitate research and industry collaboration.

(With Inputs from Deccan Herald)

Airbus and Qatar Airways have settled a dispute over the degraded surface of grounded A350 jets, Airbus said on Wednesday, averting a potentially damaging UK court trial.

The "amicable settlement" ends a bitter dispute over the safety of corrosion left exposed by cracked paint, which had led Airbus to revoke dozens of jet orders from the Gulf airline.

Airbus said the deal was not an admission of liability by either party, both of whom would move forward as partners. Reuters reported earlier that a deal could be reached on Wednesday.

This long going saga started towards the end of 2020 when Qatar Airways complained that it had detected cracks in the paint of some of its newly acquired A350 aircraft and subsequently grounded part of its fleet. Airbus rejected all allegations that safety could have been compromised due to this issue. 

Qatar Airways had 53 Airbus A350 aircraft (34 of the –900 version and 19 of the –1000 one), in its fleet plus outstanding orders for 19 more of the type when this conflict erupted. 

What followed were months of very public wrangling and a lawsuit, with the matter expected to be resolved at London’s High Court.  

A preliminary court hearing took place in London on January 19, 2023, where it became known that Airbus had implemented some design changes affecting parts of its production process, allegedly in response to the concerns about this matter. 

Airbus’ note further states that the airline and aircraft manufacturer are working together on a repair programme and to get the affected aircraft back in the air. 

Interestingly, the wording of the announcement hints at the fact that Airbus and Qatar Airways may get back to working together in the future. 

It is worth noting that, as a result of this dispute, Airbus had unilaterally cancelled Qatar Airways’ all outstanding aircraft orders, including for 50 A321neo aircraft, forcing the airline to look for alternatives at short notice in order to stick to its planned growth programme.