India’s biggest carrier by market share widened its net loss to Rs 3,174 crore for April-June from Rs 2,844 crore a year earlier.
During the quarter, the airline nearly trebled its revenue to Rs 3,170 crore as a result of a higher number of flights compared to a year earlier. But its revenue per available seat kilometer–a measurement of how much an airline earns for every occupied seat it flies every kilometer–fell 35 per cent while its yield or ticket price per kilometer fell over 23 per cent.
Fuel cost for the quarter rose close to ten times to Rs 1,215 crore. Foreign exchange loss rose five-fold to Rs 367 crore. The airline’s other income which included its interest income from investments fell 57 per cent to Rs 163 crore.
In a post-earnings conference call with analysts, the airline’s CEO Rono Dutta called the earnings “disappointing” While air travel demand had sharply recovered in February and March, the second wave battered yields and margins.
Sequentially revenue close to halved in April-June from the preceding quarter. Dutta called the month of May “distressing in terms of how the revenue shrank”. For the second quarter, typically the weakest for travel, Dutta said Covid has trumped seasonality and will decide how the quarter pans out. He said that he hoped the third wave would be flat because of an increase in vaccinations.
“With the second covid wave receding, we are seeing a measured recovery in bookings for July and August. Notwithstanding the Industry’s present challenges, we remain firmly optimistic about IndiGo’s future” he said in a statement.
IndiGo’s free cash as of the end of June, was Rs 56,207 crore, down 21 per cent from the preceding quarter and 25 per cent compared to June last year.
Dutta said that because of the ongoing pandemic, the airline was planning domestic capacity (currently 65 per cent of pre-Covid levels) every week. He added he hoped for the airline to return to full pre-Covid capacity by the end of the year. “Covid is a crisis. But it’s a short term crisis….the longer term of a stable, thumping, great story.”
