InterGlobe Aviation has reported a 25.08 per cent year-on-year decline in its net profit at INR 487.25 crore during the October-December quarter, primarily due to substantial decrease in yields due to lower fares and increase in fuel and aircraft related expenses.
Revenues during the quarter increased 16.03 per cent y-o-y to INR 4,986.49 crore. During the quarter the airline reported 16 per cent y-o-y increase in passenger revenues and 12.5 per cent y-o-y increase in ancillary revenues. The October-December quarter is usually good for the airlines since festivals like Dussehra, Diwali and Christmas fall during these three months when travel across the country increases substantially.
In terms of expenses, fuel cost which is 40-45 per cent of the total operating cost of an airline, increased by 43 per cent y-o-y due to almost 15 per cent increase in crude prices in the international market. As a consequence of increase in capacity, the aircraft rentals increased by 24 per cent y-o-y, while the landing and parking charges spiked by 44.32 per cent y-o-y during the same time. The airline has registered 31 per cent y-o-y increase in other expenses as well.
Notwithstanding the increase in topline, yields during the quarter fell by16 per cent y-o-y to INR 3.48 from INR 4.14 in the corresponding period last year.
As a consequence the operating profit decreased by 12.9 per cent y-o-y to INR 1,460.54 crore as compared to INR 1,676.81 crore in the third quarter last fiscal. The increase in expenses adversely impacted the operating margin which during the quarter decreased to 29.3 per cent when compared to 39 per cent in the corresponding period.
“We have witnessed another profitable quarter with lower yields and higher fuel prices. We see robust traffic growth ahead and will continue to grow and strengthen our network with a view to maximising our long term profitability,” said Aditya Ghosh, president and whole-time director, IndiGo.
Overall the Delhi-based low cost carrier airline saw a 30 per cent y-o-y increase in total cost. IndiGo is expected to increase is capacity to 133 aircraft from its current 126 in the fourth quarter. The average seat kilometre (ASK), as a result, is expected to increased by 25 per cent.
