IndiGo reports loss of INR 1,682 crore due to a surge in aircraft fuel expenses in Q4

InterGlobe Aviation, the operator of India’s largest airline IndiGo, on May 25 reported a consolidated net loss of INR 1,681.80 crore for the quarter ended March 2022 (Q4FY22), due to a surge in aircraft fuel expenses.

The company had posted a net loss of INR 1141.98 crore in the corresponding quarter of the previous fiscal. A Bloomberg poll had estimated a quarterly net loss of INR 978.30 crore on revenue of INR 8.000.30 crore for the quarter under review.

Revenue of the company jumped 29% from a year ago to INR 8,020.75 crore versus INR 6,222.95 crore logged in the same quarter last year. Its passenger ticket revenues came in at INR 6,884.70 crore, up 38.4% while ancillary revenues stood at INR 1,058.30 crore, up 18.8% compared to the same period last fiscal.

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IndiGo reports a loss of INR 1,682 crore due to a surge in aircraft fuel expenses in Q4

Ebitdar (earnings before interest, taxes, depreciation, amortization, and restructuring or rent cost) for the quarter fell 73.50% YoY to INR 171.80 crore from INR 648.30 crore. Ebitdar margin plunged 830 basis points to 2.1% from 10.4%.

Fuel expenses surged over 68% to INR 3,220.58 crore against INR 1,914.46 crore a year ago. Overall costs; however, rose 32% to INR 9,885 crore during the same period.

“This quarter has been difficult because of the demand destruction caused by the Omicron virus in the first half. Although traffic rebounded and demand was robust during the latter half of the quarter, we were challenged by high fuel costs and a weakening rupee.

As we work to return the airline to profitability, we are focused on maintaining our cost leadership position and continuing to build the most efficient network in the region.”

Ronojoy Dutta, CEO, IndiGo

So far this year, Brent crude has surged 50% while in the March quarter it gained nearly 39%. Operating profit margin contracted sharply to 2.1% in the quarter from 10.4% a year ago.

Dutta further said that the company believes IndiGo is best positioned to maximise revenue in a recovering market.

The airline’s fleet, comprising 41 A320ceos, 143 A320neos, 56 A321neos, and 35 ATRs, operated a peak of 1,577 daily flights, including non-scheduled flights, during the quarter.

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During Covid, IndiGo’s highest quarterly loss was INR 3,174.2 crore in Q1 FY 22.

The firm said it sees the first quarter of the fiscal year 2023 capacity to increase by around 150% while for the whole fiscal, it expects capacity to increase by around 55-60%.

As of 31 March, IndiGo had a total cash balance of INR 18,227.5 crore, while the airline’s total debt (including the capitalised operating lease liability) stood at INR 36,877.80 crore. During Covid, IndiGo’s highest quarterly loss was INR 3,174.2 crore in Q1 FY 22.

IndiGo’s load factor (occupancy rate) in the quarter ending March was 76.7% as compared to 70.2% recorded in the quarter ending March during the last year, it said. Yields, a metric of profitability, increased 19.2% to INR 4.40.

The airline’s fleet, comprising 41 A320ceos, 143 A320neos, 56 A321neos, and 35 ATRs, operated a peak of 1,577 daily flights, including non-scheduled flights, during the quarter.

ALSO READ – After 7 quarters of losses, IndiGo reported a profit of INR 130 crore

InterGlobe Aviation, which operates IndiGo, in February reported a standalone net profit of INR 130 crore for the quarter ending December 31, 2021, due to a rebound in travel demand during the holiday season, though fuel costs surged.

It reported a net loss of INR 620 crore in the year-ago period. Revenue from operations rose 90% to INR 9,295 crore as against INR 4,910 crore in Q3FY21.

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