IndiGo’s net loss widens to ₹1,194 crore despite cost cuts, revenue dips 66%
- IndiGo's net loss widened to ₹1,194 crores year-on-year but halves as compared to last quarter.
- The company's revenue took a massive hit and was down 66% YoY to ₹2,741 crore.
- According to the Directorate General of Civil Aviation (DGCA), India's domestic air passenger traffic crashed over 58.39% in September on a year-on-year basis.
- IndiGo shares have gained over 34% since the beginning of the quarter.
AdvertisementThe pandemic slump continues to weigh on the aviation sector. India's largest private airline IndiGo's net loss widened to ₹1,194 crores for the quarter under review compared to ₹1,062 crore in the same quarter last year. However, this is much lower compared to the loss of ₹2842.5 crore in the first quarter.
The company's total revenue took a massive hit and was down 66% YoY to ₹2,741 crore compared to ₹8,105 core in the same period last year.
What went wrong with IndiGo despite air travel resumption?
Fewer people boarded flights last quarter
The pessimism and stigma around air travel continued to hamper the business of the aviation industry. Indigo airlines carried nearly 69% fewer passengers compared to what it carried last year.
According to Prabhudas Liladher, "Although airlines were permitted to operate at 45% (later increased to 60% in September) of approved summer schedule for a large part of the quarter, scale-up of operations remained below expectations due to localized lockdowns, slot restrictions at major airports and low consumer confidence."
Additional challenges to deal with
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. However, this was added a bit by the low Jet fuel prices in the last quarter.
According to the Directorate General of Civil Aviation (DGCA), India's domestic air passenger traffic crashed over 58.39% in September on a year-on-year basis. Despite that IndiGo held the larger share in the market at nearly 58%.
The company is also better positioned to handle the headwinds among its peers as it has a total of ₹17,931.8 crore in its books. It also significantly cut down on cost, its aircraft and engine rentals were down nearly 33.1% compared to the same period last year.
A gradual recovery is fuelling hopes
AdvertisementWith the arrival of the festive season, air travel is expected to improve gradually.
"We are pleased that we are slowly but surely stair-stepping our way back to normal capacity. While we are very much focused on managing the crisis of the present, we are also reimagining the promise of the future. Once we are back at 100% capacity, we will have lower unit costs, a stronger product, a more efficient fleet and a robust network. We are impatient for the arrival of the future," said Ronjoy Dutta CEO, IndiGo.
IndiGo shares have also gained over 34% since the beginning of the quarter.
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