InterGlobe Aviation Ltd. – the parent company of IndiGo – reported a surprise profit for the first time since the start of the pandemic. Receding cases of viruses in the country and festive season helped India’s largest airline to swing to profitability in the December-ended quarter. Even on the conference call, the company said the easing of Covid cases and restrictions led to profit.

 

Analysts were expecting IndiGo to report a loss, but it surprised the street with a profit of Rs 128 crore. The company’s revenue continued to remain marginally below the pre-Covid levels, but its EBITDAR – matrix to measure operating profit – was comfortably above the pre-Covid levels.

 

• Revenue up 66% to Rs 9295 crore vs Rs 5609 crore (Pre-Covid:- Rs 9932 crore)
• EBTIDAR up 7.6x to Rs 1905 crore vs Rs 251 crore (Pre-Covid:- Rs 1804 crore)
• EBITDAR Margin at 20.5% vs 4.5% (Pre-Covid:- 18.2%)
• Net Loss of Rs 128 crore vs Rs 1440 crore (Pre-Covid:- Rs 491 crore)

Higher capacity flew in Q3 owing to lower Covid related restriction and strong demand, better capacity utilisation – also known as passenger load factors, and higher ticket prices aided the financials. Yields measure the average fare per passenger per kilometer.

 

• Capacity increased by 45.6%
• PLF increased to 79.7% Vs 71.1%
• Yields increased 5.3% to Rs 4.41 Vs Rs 4.19

On the flip side, higher fuel costs are impacted. Though the airline hiked ticket prices across segments to mitigate the higher fuel prices, the quantum of the hike was not commensurate with cost escalation. Sequentially fuel prices increased by 13.5%.

 

During the quarter, the company continue to replace its older aircraft with the new one – a move which is expected to reduce its overall costs. In Q3, it replaced 16 of its old planes – A320ceo – with new planes – A320neo, A321neo, and ATR. However, on a net basis, it added only 4 aircraft during the quarter.

 

IndiGo also appointed the promoter – Rahul Bhatia – as the managing director. He would oversee all aspects of the airline, and actively lead the management team, said Meleveetil Damodaran, IndiGo’s chairman. The co-founder’s agenda would focus on expanding the airline’s presence in India and in international markets, said the company in a statement.

 

In Q3, the company’s debt was reduced by 8% sequentially, while its free cash increased by 23%. The company also said that it does not need further liquidity.