The carrier, operated by
, posted a loss of 11.5 billion rupees ($157 million) in the three months through March, its fourth quarter, widening from a loss of 8.7 billion rupees a year earlier. The average forecast from analysts was for a deficit of 4.5 billion rupees.
Still, the company’s shares were up 0.2 per cent as of 10:39 a.m. in Mumbai on Monday having earlier jumped as much as 5.5 per cent.
“This has been a very difficult year with our revenues slumping hard due to Covid, showing some signs of recovery during the period December to February and then slumping again with the second wave of the Covid,” Chief Executive Officer Ronojoy Dutta said in a statement Saturday. “While we have seen a sharp decline in revenues in March through May, we are encouraged by the modest revenue improvements starting last week of May and continuing through June.”
The pandemic has pushed many airlines around the world to the brink and beyond, and the intensity of the outbreak in India has made it extra hard for operators there. The country’s carriers will need about $5 billion to survive, but they only have access to about $1.1 billion through share offerings and other means, according to CAPA Centre for Aviation. IndiGo and Air India Ltd. will account for the bulk of the $8 billion in losses by 2022, CAPA said.
“The direction for India should be inline with the U.S. travel market where effective containment of Covid will lead to a total resumption of air services with a return to flightline of the entire airline’s capacity with an average 80 per cent occupancy boosting up yields,” said Mark D Martin, CEO of Martin Consulting LLC, an aviation consulting and safety firm. He predicts Indigo will return to profit in the year through March 2023 if Indian authorities curb the virus.
India had for a while been fairly robust for airlines thanks to its vast domestic network, though any positivity evaporated with the arrival of a devastating virus wave, which put the brakes on travel. The numbers are staggering, and likely under-reported. Latest data show nearly 30 million confirmed Covid-19 cases and more than 346,000 deaths.
IndiGo said traffic, measured by revenue passenger per kilometer, dropped 29 per cent in the first three months of 2021 from a year earlier. It filled 70.2 per cent of its seats in the quarter, compared with 82.9 per cent a year earlier. The carrier had 185.7 billion rupees cash and 298.6 billion rupees total debt as of March 31.
IndiGo Asks Employees to Take Leave-Without-Pay in Coming Months
“We have run out of words to describe the state of Indian airlines,” CAPA said in its India Airline Outlook last week. “But as we have repeatedly emphasized, the industry is standing on the edge of a cliff. This is true even for airlines with access to large pools of capital.”
IndiGo had been planning last year to raise as much as 40 billion rupees by selling new shares, getting board approval in August. It then dropped the plan in January, saying internal sources of cash would be sufficient as demand started to recover. That optimism was soon snuffed out as India’s outbreak intensified. The board is now considering raising capital again.
