IndiGo records net loss of $215m
IndiGo produced its performance report for the quarter ending in March as it also marked the end of the financial year in India, which runs from April 1st to March 31st every year. The low-cost giant’s losses came even as total revenue for Q4 jumped to almost 30% year-on-year compared to the same quarter last year.
IndiGo reported a consolidated net loss of Rs 1,681.80 crore (approx. $216 million) for the quarter ending in March 2022 compared to Rs 1,147.20 crore (approx. $147 million) in the corresponding quarter last year.
The loss comes even as the airline’s total revenue increased by 29% year-on-year to Rs 8,207.50 crore (approx. $1.05 billion) from Rs 6,361.80 crore (approx. $819 million) in the same quarter last year.
For Q4, passenger ticket sales accounted for Rs 6,884.7 crore (approx. $887 million), an increase of 38.4%, and ancillary revenues stood at Rs 1,058.3 crore (approx. $136 million), an increase of 18.8% compared to the same period last year.
While airlines reporting losses in these turbulent times is not surprising, IndiGo’s Q4 results follow a profitable third quarter in December 2021, when it reported positive growth for the first time in over two years.
The carrier recorded a profit of ₹129.8 crores ($17.3 million), backed by a massive 90% rise in revenue compared to the same quarter the year before.
The emergence of a new COVID variant, Omicron, around Christmas last year dictated ticket sales for the following several weeks, eating into whatever little gains the airline made in the previous months.
Even as traffic rebounded in the second half of the previous quarter, the Russia-Ukraine crisis sent the industry into another tailspin, driving fuel prices to levels never seen in recent times.
Indeed, IndiGo’s report states that fuel expenses surged over 68% to Rs 3,220.58 crore (approx. $414 million) against Rs 1,914.46 crore (approx. $246 million) a year ago. Overall costs for the airline also rose 32% to Rs 9,885 crore (approx. $1.27 billion) during the same period.
Company CEO Ronojoy Dutta said: “This quarter has been difficult because of the demand destruction caused by the Omicron virus in the first half. Although traffic rebounded and demand was robust during the latter half of the quarter, we were challenged by high fuel costs and a weakening rupee.”
While there’s plenty to look forward to in the coming few months, with air traffic gradually approaching pre-COVID levels, IndiGo is aware of the challenges and competition it faces in the emerging Indian aviation sector.
The Tata Group airlines – Air India, Vistara, AirAsia India, and Air India Express – are believed to have improved their market share recently, with IndiGo reporting a slight dip – although it still maintains an impressive lead.
