As expected, IndiGo reports a net loss of ₹1,750 crore after domestic air passenger dips and costs continue to pile up
- IndiGo has reported a net loss of ₹870 crore for the fourth quarter ended March 31.
- The company’s total revenue was up 5% YoY to ₹8,299 crore compared to ₹7,883 in the same period last year.
- According to Directorate General of Civil Aviation (DGCA), India’s domestic air passenger traffic crashed by over 33% in March on a year-on-year basis.
The company’s total revenue was up 5.3% YoY to ₹8,299 crore compared to ₹7,883 in the same period last year.
“Closure of flight operations during national lockdown on account of COVID-19 significantly impacted revenue for the quarter,” the company said in a statement.
Costs continue to pile up for IndiGo
The airline reported that expenses were up by 30% during the fourth quarter and the cost per available seat-kilometre (CASK) — excluding fuel — registered an increase of 42.1%. The pressure was compounded by the weakening of the rupee.
According to Directorate General of Civil Aviation (DGCA), India’s domestic air passenger traffic crashed by over 33% in March on a year-on-year basis after the government announced a nationwide lockdown to deal with the COVID-19 pandemic and airlines to halt domestic operations — a week after It announced a ban on international flights.
However, the ban was not applicable for cargo flights, but the airlines experienced a major cash crunch as a big chunk of the revenue comes from passenger flights. Less than 77.62 lakh passengers travelled in March as against 1.15 crore for the corresponding period of the previous year. In which, IndiGo has a 40% market share. Indigo ferried around 43 million passengers in 2019.
Since the beginning of 2020, Indigo’s share price has taken a massive hit as people were avoiding unessential travel in the times of coronavirus pandemic. The company reported that basic earnings per share fell by ₹22.63 in the fourth quarter.
The share price has declined over 27.51% since the beginning of the fourth quarter to date. However, the stock recovered over 3% on May 13. The stellar rally in airline stocks was triggered by the Indian government’s decision to resume domestic flights from May 25.
The company, unlike other airlines, tried hard to refrain from pay cuts in the month of March and April following the call from Prime Minister Narendra Modi not to cut salaries of people they employ. But, buried under the losses, the country’s largest domestic airline company announced pay cuts ranging between 5 and 25% this month.
SEE ALSO: IndiGo may clock heavy losses in Q4 after a 33% drop in India’s domestic air passenger traffic in March
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