Compensation from P&W, Airbus has IndiGo net soaring fourfold

The airline said the bottom line was boosted by a massive 710 bps spike in profit margins to 10.4 % from 3.4 % a year ago.

InterGlobe Aviation-run IndiGo on Tuesday reported a massive spike in September quarter net at ₹551.5 crore boosted by a one—time payment towards engine issues and delayed aircraft deliveries and higher margins.

The largest airline that controls over 38 % of the domestic air passenger market had reported a 139.8 crore net income in the corresponding quarter last fiscal year. For the reporting quarter, net soared 294.4 %.

The airline said the bottom line was boosted by a massive 710 bps spike in profit margins to 10.4 % from 3.4 % a year ago.

“Profitability was favourably impacted by better revenue management and credit received from manufacturers related to aircraft grounding and delivery delays,” the airline said in an exchange filing without disclosing the quantum of payments it has received from Airbus for delayed deliveries of A320 Neos and also from the American engine maker Pratt & Whitney.

However, it said its other income rose over 33.5 % to ₹214.6 crore.

IndiGo has been facing problem with aircraft engines supplied by P&W in its A320 Neos for quite some time, which also led to grounding of as many as eight aircraft since June.

Indigo deploys only Airbus planes. On top of it, the plane- maker Airbus has been unable to meet delivery of some of these A320 Neos on time too.

The airline operates a fleet of 141 aircraft including 24 A320 Neos. It had placed an order for over 430 aircraft some of which have been delivered.

Its income from operations jumped 27 % to ₹ 5,291 crore, while other income rose 33.5 % to ₹ 214.5 crore from ₹160.7 crore, taking the total revenue to ₹5,505.6 crore up 27.2 % from ₹4,327.7 crore.

The load factor rose 180 bps to 84 % while the yield rose 8.9 % to ₹3.57 from ₹3.28.

With an average ATF price of ₹50.17 which is 2.5 % up over ₹ 48.96 a year ago, fuel expenses rose 6.1 % to ₹1,647.3 crore while aircraft and engine rentals also rose at a similar quantum to ₹ 819.3 crore. Other expenses jumped 31.6 % to ₹ 1,455 crore while finance cost rose over 40.5 % to ₹ 85.7 crore.

Its cash balance rose 88.5 % to ₹12,92.56 crore from ₹685.72 crore while debt declined by 7.5 % to ₹ 253.68 crore from ₹ 274.28 crore.