InterGlobe Aviation, which operates low-cost air carrier IndiGo, posted a 73.3% fall in March-quarter profit on Wednesday, hit by higher expenses as increased fuel costs and foreign exchange losses took a toll on its bottomline.
While net profit fell to ₹117.64 crore for the three months ended March 31, from ₹440.31 crore a year earlier, revenue from operations rose about 20% to ₹5,799.1 crore. Last week, Indigo had announced the departure of its president and whole-time director Aditya Ghosh.
‘Income climbs’
The company’s total income in the fourth quarter of 2017-18, however, climbed 17% to ₹6,056.84 crore.
The board declared a dividend of ₹6 per share.
IndiGo, which had to cancel hundreds of flights in March due to engine issues with some of its A320neo planes powered by Pratt & Whitney engines, recorded a rise of 30.2% in its total expenses to ₹5,890.64 crore in the latest quarter. IndiGo’s Chief Financial Officer Rohit Philip said during a conference call to discuss the financial results that the lower quarterly profit was mainly due to a rise in fuel costs, foreign exchange loss and lower yield. On the incoming A321neos, Mr. Philip said, “These will have 15% less seat mile cost, which will help.”
‘Utilisation drops’
The CFO also said aircraft utilisation was down to 12.5 hours a day this quarter, lower than 12.6 hours a day earlier due to the grounding of the A320neos. IndiGo’s total consolidated income stood at ₹23,967.74 crore for last fiscal, compared with ₹19,369.57 crore in 2016-17.
“We have reported our highest ever annual profits [35.1% rise to ₹2,242.37 crore] for fiscal 2018. We continue to execute on our growth plans and are putting in place the management team to execute our plans,” IndiGo co-founder and interim CEO Rahul Bhatia said.
“India is a severely underpenetrated market. We are cognisant of challenges we face and are taking steps to address them,” Mr. Bhatia added. On the neo engine issues, the interim CEO said it would take some time to get resolved. “We have hired people with domain expertise to solve the issue,” he said. Mr. Philip said Indigo received money from Pratt & Whitney in this quarter as compensation but the amount was not divulged.
IndiGo said its total capacity for the year was 63.5 billion Available Seat Kilometres (ASKs), an increase of 16.4% compared with the previous year. “Our total capacity for the fourth quarter was 17.1 billion ASKs, an increase of 20.9%,” he said. “This is lower than the capacity... previously guided due to the grounding of some neos [in] the quarter.”
Mr. Philip also said the Revenue per Available Seat Kilometre or RASK for the quarter was ₹3.40 compared to ₹ 3.52 during the same quarter last year, a decline of 3.2%. “This decline in RASK was primarily driven by lower yields partially offset by higher load factors. While our yields were down by 5.6% to 3.31 rupees, our load factors were up by 2.8 points to 88.9%,” he said.
Fuel prices, IndiGo said, increased by 11.6% which led to an overall increase in the CASK by 7.4%. “Our CASK for the quarter was ₹3.30 compared to ₹3.08 during the same period last year. CASK excluding fuel was ₹1.94 in the current quarter, an increase of 5.3% from the same period last year primarily on account of depreciation of Indian Rupee this quarter compared to an appreciation in the Indian Rupee in the same period last year. Similar to previous quarters, we also paid a GST of ₹35.6 crore under protest in the March quarter,” Mr. Philip added.
