IndiGo clocks 400% profit rise in Q4, but annual profit took a sharp hit

India’s largest airline, with an almost 50% market share, IndiGo, just declared their quarterly and annual results today. The key highlights of the holding company, InterGlobe Aviation results, were that net profit for the January to March 2019 quarter rose 401% from a year ago. But, on an annual basis, IndiGo’s profit for 2018-19 was down 93%.

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The airline reported a net profit of INR 589.59 crore during the quarter, as compared to INR 117.64 crore a year ago. Revenue during the period grew 35.46% from INR 6,097.68 crore a year ago to INR 8,259.81 crore in the latest quarter.

For the fiscal year 2018-19, IndiGo reported a profit of INR 157.25 crore, down 93% from INR 2242.32 crore in 2017-18. The airline’s revenue stood at INR 29,821.37 crore during FY19, up 24.42% from INR 23,967.74 crore in FY18. The airline called the last year (2017-18) an aberration.

interglobe aviation results

While I will do a deep dive into the results at some point, I thought it would be interesting to share some essential pointers from the conference call. The CEO, Ronojoy Dutta, CFO Rohit Philip and other members of the team were on the call.

The CEO made note that it was a break-even year for them, with a sharp turn around for their situation in February and March as Jet Airways went under. They expect the impact of Jet Airways to go away by June 2019, as they and other carriers jump in to fill the gaps. Some international markets will continue to see the gaps, however.

Asked about their international strategy, the CEO dilly-dallied on a firm answer. He said they are studying the induction of widebodies in their fleet, but they are not ready yet to place an order. The airline intends to induct only neo aircraft this year, and will roughly add half their capacity for domestic flights, and a half for international segments.

Given the airline has saturated the metro segments, they are now building secondary hubs to tertiary cities such as to Gaya. The airline does not see an issue with being at 50% of domestic market share at the moment. Further, IndiGo expects to capitalise on the slots made available to them at Mumbai, and the rights made available to fly to the Middle East. IndiGo already went big into the Middle East last year. IndiGo plans to fly to China and Hanoi in the coming period.

In terms of absorbing Jet Airways staff, IndiGo has hired 285 pilots already and expects to hire more. They expect their already hired Jet Airways pilots to be flying within the next few months.

The airline has not declined that they are studying a business class for their long haul segments. IndiGo claims, there is no one clear model for flights over 6 hours. So everything is on the table. Of course, the Istanbul flight is hurting right now because of the Pakistan Airspace being blocked. And it is hurting the passenger because IndiGo thinks the current A320/1 configuration would work for these flights.

And the airline did not shy away from the discussion on the rift between the promoters which found its way in the media a few days ago. As per the airline, the founders see eye to eye on most things, including strategy, but there is one issue which is being discussed and will be put to rest soon. What the issue was, they did not comment on.

It will be interesting to see how IndiGo takes this opportunity to further get inroads in India and abroad, with Jet Airways being out of business, and how will they compete with the other players in the market who are scaling up as well, such as SpiceJet and Vistara.

What do you think does 2019-20 hold for IndiGo? What new opportunities will it bring?


About Ajay

Ajay Awtaney is the Founder and Editor of Live From A Lounge (LFAL), a pioneering digital platform renowned for publishing news and views about aviation, hotels, passenger experience, loyalty programs, travel trends and frequent travel tips for the Global Indian. He is considered the Indian authority on business travel, luxury travel, frequent flyer miles, loyalty credit cards and travel for Indians around the globe. Ajay is a frequent contributor and commentator on the media as well, including ET Now, BBC, CNBC TV18, NDTV, Conde Nast Traveller and many other outlets.

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