India’s largest private airline clocks more losses than the profits of last three years
- IndiGo reported its biggest-ever net loss of ₹2842.57 crore for the first quarter ended June 30.
- The company's total loss this quarter is a lot more than its total profit in the last three years.
- The company's total revenue took a massive hit during the lockdown and was down 92% YoY to ₹7,66.73 crore.
AdvertisementInterGlobe Aviation, India's largest private airline, has reported its biggest-ever net loss of ₹2842.57 crores for the first quarter ended June 30.
The company's total revenue took a massive hit during the lockdown and was down 92% YoY to ₹7,66.73 crore compared to ₹9,420 in the same period last year.
The company's total loss in this quarter is 23% more than its total profit in the last three years.
However, the street projected its loss to be somewhere around ₹2,431 crore.
"The aviation industry is going through a crisis of survival, and therefore, our cash balance remains our number one priority. However, we also recognize that major disruptions offer companies opportunities for improvement in product, customer preference, costs and employee engagement. We have built a strong team which is working on multiple fronts to ensure that we emerge from this crisis stronger than ever," CEO Ronjoy Dutta said in the company filings to the stock exchanges.
With the suspension of air travel for almost two months in the last quarter, IndiGo experienced a total washout quarter. Apart from the lockdown, the additional cost of operating in the times of coronavirus and the burden of aircraft rentals was piling up. Even, CEO Ronjoy Dutta himself admitted while laying off employees earlier last week. He said, "IndiGo is flying only a small percentage of its full fleet of 250 aeroplanes."
Apart from travel restrictions, the budget carrier has faced additional challenges in the form of restricted ticket pricing, classified on the basis of flight duration, till August 24. Jet fuel prices have hit record highs in the past quarter because of the low demand and less air traffic.
According to Directorate General of Civil Aviation (DGCA), India's domestic air passenger traffic crashed over 43% in May on a year-on-year basis. It continued with a 50% dip in June even after the government eased restrictions on domestic travel.
And, that is the reason Indigo's shares have not seen a rally in the past months. The shares of the largest domestic carrier is down over 15% since March 31, and is expected to remain low with no respite in sight for the COVID-led selloff in the aviation industry.
AdvertisementThe shares closed trade less than a percent lower ahead of its earnings.
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IndiGo’s ‘grounded quarter’ may lead to more loss than all the profit in the last three years
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