TRAVEL RESTRICTIONS and a subsequent lockdown on domestic and international air travel in the January-March period pulled the bottomline of InterGlobe Aviation, which runs India’s largest airline IndiGo, in to the red. The company posted a net loss of Rs 870.8 crore for the March-quarter, compared with a Rs 595.8-crore profit after tax same period last year.
The free cash flow of the company, which is the only cash-positive airline in India, depleted to Rs 8,928.1 crore as of March 31, compared with Rs 9,412.8 crore as of December 31, 2019. Notably, the last seven days of the January-March quarter, no passenger flights were operated by IndiGo on either domestic or international routes.
“Closure of flight operations during national lockdown on account of COVID-19 significantly impacted revenue for the quarter,” the company said in a regulatory filing. Domestic flight services remained suspended for two months from March 25 when the lockdown was imposed to contain the Covid-19 outbreak. While domestic flights were allowed to resume on May 25, international flights are yet to recommence.
Speaking to analysts after declaring the results, IndiGo’s CEO Ronojoy Dutta said that while the company’s revenue position has been stronger after resumption of domestic flights, it could be mainly on account of pent-up demand. Going ahead, he said that the airline industry was witnessing various factors that would dampen demand for air travel.
“Let me state clearly that there is a dampening effect on the revenue. There is a customer fear, we all know how strong that is. On top of that the economy is weak. Even if the customers would want to travel, the economy would have depressed demand. Then there is an uncertainty of restrictions – what will Karnataka allow, what will Kerala allow. All those three things are hugely dampening for traffic,” Dutta said, adding that in the longer term air travel would grow as the economy recovers.
In the three months ended March, total income increased to Rs 8,634.6 crore, compared with Rs 8,259.7 crore in the year-ago period. Revenue from operations increased to to Rs 8,299.1 crore. Even so, a significant rise in total expenses proved to be a drag on the company’s financials. Total expenses shot up 30 per cent to Rs 9,924.4 crore in the quarter-ended March 31.
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