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IndiGo posts Rs 1,062-crore loss on lease liabilities

The current losses were up 63 per cent year-on-year, compared to a Rs 651-crore loss in Q2FY19, when the airline was impacted by high fuel costs, rupee depreciation and intense competition leading to low fares.

By: ENS Economic Bureau | New Delhi | Published: October 25, 2019 1:04:00 am
Total expenses went up 27.6 per cent y-o-y to Rs 9,571 crore during Q2FY20, with a weaker rupee increasing the lease liabilities and re-assessment of future maintenance costs in a seasonally weak quarter.

InterGlobe Aviation, which runs low-cost airline IndiGo, on Thursday reported higher-than-expected losses of Rs 1,062 crore in the July-September period due to higher expenses.

The current losses were up 63 per cent year-on-year, compared to a Rs 651-crore loss in Q2FY19, when the airline was impacted by high fuel costs, rupee depreciation and intense competition leading to low fares.

Total expenses went up 27.6 per cent y-o-y to Rs 9,571 crore during Q2FY20, with a weaker rupee increasing the lease liabilities and re-assessment of future maintenance costs in a seasonally weak quarter.

The costs related to aircraft repair and maintenance nearly doubled to Rs 153 crore, while depreciation and amortisation costs grew more than fivefold to Rs 1,029 crore. Employee costs too increased 56 per cent y-o-y to Rs 1,206 crore as the airline inducted nearly 600 pilots and staff from the grounded Jet Airways. Aviation turbine fuel costs, meanwhile, were higher by 2.6 per cent, much lower than the 84 per cent y-o-y increase a year earlier.

While operating revenues jumped 31 per cent y-o-y to Rs 8,105 crore, operating margins or the Ebitdar (earnings before interest, tax, depreciation, amortisation and rentals) was down 40 bps y-o-y to 3.2 per cent.

The airline’s revenues were pushed up by better volumes — it carried 15.4 per cent more domestic passengers in the September 2019 quarter — and better yields. The per passenger revenue stood at Rs 3.52/km in Q2FY20, up 9.4 per cent y-o-y.

According to the analysts, average domestic fares were up 7-8 per cent y-o-y during Q2FY20.

IndiGo, which had a fleet of 245 aircraft at the end of September 2019, added seven new domestic routes and six international destinations during Q2FY19.

The airline has benefited from closure of Jet as it received more than 40 slots at the busy Delhi and Mumbai airports.

According to the directorate general of civil aviation, domestic passenger traffic increased by 1.2 per cent y-o-y in September.

The airline commanded a domestic market share of 47.7 per cent during Q2FY20 as compared to 42.4 per cent a year ago.

It had a total cash balance of Rs 18,736 crore at the end of September 30, while its total debt at 19,841 crore.

IndiGo’s shares closed Thursday’s session at Rs 1,666.35, up by 0.75 per cent, on the BSE. FE

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