Profit Surges To Rs 1,422.6 Crore Amid Robust Travel Demand

Profit Surges To Rs 1,422.6 Crore Amid Robust Travel Demand

Fuelled by robust travel demand, InterGlobe Aviation on Friday reported a steep rise in profit at Rs 1,422.6 crore in the three months ended December 2022. The parent of the country’s largest airline IndiGo had a Profit After Tax (PAT) of Rs 129.8 crore in the same period a year ago.

IndiGo’s total income jumped to Rs 15,410.2 crore in the third quarter of the current fiscal from Rs 9,480.1 crore in the year-ago period, according to a release.

Excluding foreign exchange loss, the airline reported a profit of Rs 2,009.1 crore in the latest December quarter compared to Rs 125.2 crore in the year-ago period.

In a reflection of strong travel demand, the budget carrier ferried 2.23 crore passengers in the third quarter, an increase of nearly 26 per cent compared to the same period a year ago when it stood at 1.78 crore.

The load factor, a measure of seat occupancy, rose to 85.1 per cent in the December quarter as against 79.7 per cent a year ago.

“Third quarter performance was strong both operationally and financially in the backdrop of robust demand for air travel. The wide range of initiatives that were set in motion across the organisation have started to yield results,” IndiGo CEO Pieter Elbers said.

He also said the company reported its highest-ever quarterly revenue of Rs 154.1 billion and robust profit of Rs 14.2 billion for the third quarter of fiscal year 2023.       “With a modern fleet of over 300 aircraft, we continue to serve the market with further capacity growth planned across domestic and international sectors.

“We will be concluding FY23 at a higher side of the range of the previously guided capacity estimates. The bookings are strong for the fourth quarter with the effects of seasonality in yields. With this trend, we’re expected to close fiscal FY23 operationally profitable, excluding the impact of foreign exchange, Elbers later said at the post-earnings analyst call.

According to him, forward bookings look encouraging and combined with relatively stable fuel prices in Q4, “we hope to continue with this positive trend. We’re looking forward to the next fiscal year with great enthusiasm building on our ambitious expansion.” On the capacity, he said that at the beginning of this (fiscal) year, IndiGo indicated the capacity guidance between 13-17 per cent. And despite the challenging situation on the supply chain, with a range of mitigation actions, it has been able to maintain the high end of that capacity guidance for the next year.

“We have a capacity guide, somewhere around the north of the mid-teens. So that’s our guidance for next year, we still have flexibility in adjusting that going forward,” he added.

At the end of December 2022, IndiGo had a total cash balance of Rs 21,924.7 crore, including Rs 10,612.5 crore of free cash.

“The capitalised operating lease liability was Rs 410,420 million. The total debt (including the capitalised operating lease liability) was Rs 444,752 million,” the company said.

With demand for international travel continuing to grow, the airline aims at expanding international connectivity further in 2023, the IndiGo CEO said, and added that “we will continue to explore strategic partnerships in the future that will allow added connectivity and provide us with more global visibility”.

Elbers said as part of this international expansion roadmap, the airline is looking to launch air services to Jakarta (Indonesia) and Nairobi (Kenya).

IndiGo Chief Financial Officer Gaurav Negi said the airline is working with the OEMs (Original Equipment Manufacturers) to get some relief related to both the delay in aircraft delivery as well as grounding of some of the planes, owing to engine and supply chain issues.

“We continue to keep working with the OEMs for the remainder of the aircraft on ground that we have to adequately compensated,” Negi said.

The airline has reported an EBITDA of Rs 34 billion with an EBITDA margin of around 23 per cent compared to an EBITDA of Rs 3.3 billion and EBITDA margin of around 2 per cent for the quarter ended September 2022.

“This improvement in EBITDA was driven by a sizable increase in revenue and a reduction in adverse impact of fuel and foreign exchange. This is suggestive of a relatively stable operating environment versus a couple of quarters ago,” Negi added.

The fuel costs reduced by 11 per cent primarily due to a reduction in average fuel prices by close to 7 per cent against September quarter, he said, adding that the average fuel prices are still higher by about 50 per cent as compared to the third quarter of FY23.

“Operational profitability, which is excluding foreign exchange loss, stands at around Rs 20 billion as against the loss of Rs 41 billion for the year to date December 2021, which is indicative of a steady recovery from the pandemic,” he added.

Shares of IndiGo declined 1.21 per cent to settle at Rs 2,100 apiece on the BSE.

(This story is published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)

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