InterGlobe Aviation on Wednesday reported a net loss of Rs 652 crore for the quarter ended September against a profit of Rs 551 crore in Q2FY18. High fuel costs, rupee depreciation and intense competition leading to low fares hurt the airline’s financials.
During Q1FY19, Indigo had reported 97 per cent dip in net profit to Rs 28 crore due to same factors. The revenue from operations was up 17 per cent y-o-y to Rs 6,185 crore in Q2FY19 vs Rs 5,291 crore in Q2FY18 on the back of strong passenger growth. Indigo’s domestic passenger traffic rose 32 per cent y-o-y to 14.5 million between June-September 2018.
However, this did not translate into better financial results as costs soared for the largest domestic carrier. The fuel bill, which constitutes 40 per cent of the airline’s expenditure, rose 84 per cent y-o-y to Rs 3,035 crore during Q2FY19.
According to oil marketing company Indian Oil, the aviation turbine fuel (ATF) prices were up 42 per cent y-o-y to Rs 68,879 per kilolitre in New Delhi during Q2FY19.
The company added capacities to the tune of 29 per cent y-o-y; raised available seat kilometres (ASKs) from 15.1 billion to 19.5 billion in the period under review even as it reported flat passenger load factor at 84.5 per cent in Q2FY19 vs 84 per cent in Q2FY18. The value of rupee was down 11 per cent y-o-y to Rs 71 per US dollar during the September quarter.
The airline yields were down 10 per cent y-o-y due to low fare scenario in the domestic market. It reported an yield of Rs 3.21/km in Q2FY19 against Rs 3.56/km in the same quarter last year.
Indigo’s earnings before interest, tax, depreciation, amortization and rent costs (Ebitdar) plummeted 86 per cent y-o-y to Rs 220 crore in Q2FY19 from Rs 1,581 crore in Q2FY18. The Ebitdar margin was down 88 per cent to just 3.5 per cent vs 30 per cent during the September quarter a year ago.
“The yields during the 0-15 days period remain weak due to intense competition. We see the strong demand for air travel to continue and we are scaling our operations to meet it,” Rahul Bhatia, co-founder and interim CEO, Indigo, told analysts during the post-earnings call.
According to a PTI report, IndiGo co-founder and interim CEO Rahul Bhatia has urged airline employees on Wednesday to help reduce costs further besides being courteous, after parent IndiGo reported the first-ever quarterly loss at Rs 652.1 crore in September following its listing in November 2015. Bhatia, in an e-mail to the employees, also expressed “disappointment” at the financial performance, but said he was confident of success going forward. —FE