IndiGo posts first quarterly loss in two years in Q2FY25

Bengaluru: For the first time in two years, Indigo, the airline with the largest domestic market share, reported a bleeding bottom line, posting a net loss of Rs 990 crore in the quarter ended September 30, dropping from a net profit of Rs 188.9 crore in the year ago period.

Haunted by the faulty Pratt & Whitney engines, the airline saw over 70 of its aircraft grounded during the period and grappled with fuel costs that escalated 12.8 per cent year-on-year (YoY) to Rs 6,605.2 crore, accounting for 35.8 per cent of total costs. It didn’t help that aircraft rental and maintenance costs jumped nearly 30% and costs from newer aircraft and engine rentals rose by 290 per cent to Rs 763.60 crore during the quarter.

Increase in value added tax (VAT) on aviation turbine fuel by some states, inflation in operating line items, high operational costs due to capacity addition are the factors which drove the overall costs up by 21.9 per cent YoY to Rs 18,666 crore in the period under review.

Gaurav Negi, airline’s Chief Financial Officer said in a post-results call with analysts, that the number of aircraft on ground will reduce to 'sub 60s' in the months to come from 'mid 70's' last year. He expects the grounded aircraft to further decrease to 'mid 40's' by the next financial year.

"In a traditionally weaker second quarter, results were further impacted by headwinds related to groundings and fuel costs. We have turned the corner as the number of grounded aircraft and associated costs have started reducing," Pieter Elbers, CEO, IndiGo said.

“IndiGo’s growth and expansion continued as our topline grew by 14.6% on a YoY basis, in the second quarter to Rs 17,800 crore. The tailor-made business class will be introduced on the Delhi-Mumbai route and later, it will be available on 12 metro routes with a fleet of 40 plus aircraft," he added

The airline will also be launching services to more international destinations this fiscal.

Available seat kilometres (ASKs), a measure of the airline's passenger carrying capacity, grew 8.2% YoY in the period under review.

Yield, which is average revenue generated per passenger, grew by 2.3 per cent YoY to Rs 4.55 per kilometer, indicating higher ticket prices or improved demand. However, this is a decline from the June quarter's yield of Rs 5.24 per km as the airline offered discounts to attract customers in a seasonally weaker second quarter.

While revenue per available seat kilometre (RASK) stood at Rs 4.45, cost per ASK (CASK) was at Rs 4.69. The airlines' RASK rose 4.8% from a year ago, while CASK rose 11.8 per cent from a year ago.

This disparity is due to high fuel costs and discounts offered on some routes.

"For the quarter, our passenger ticket revenues were Rs 14,359 crore, an increase of 9.9 per cent and ancillary revenues were Rs 1,875 crore, an increase of 20.9 per cent compared to the same period last year," the release said.

IndiGo carried a total of 244.49 lakh passengers, holding a market share of 62.5 per cent during the quarter. The company has a total of 410 aircrafts under its fleet and expects third-quarter capacity to grow by low-double-digit percentage YoY.