Indigo posts ~620-cr loss in December qtr

Logs 4th quarterly loss; will ramp up capacity to return to profitability

Interglobe Aviation, which operates the country’s largest domestic airline Indigo, reported a net loss of ~620 crore in the third quarter of pandemic-struck 2020-21 financial year, against a net profit of ~496 crore in the year-ago period.

This is the fourth consecutive quarterly loss for the airline. In the June and September quarter, it had incurred a net loss of ~2,884 crore and ~1,194 crore, respectively.

While revenue from operations improved sequentially to ~4,910 crore it was still 50 per cent lower on year-on-year (YOY) basis.

The airline was able to control its costs better, reducing its cash burn to ~15 crore a day from ~30 crore in the first quarter. It has decided to not pursue a qualified institutional placement (QIP) offering and will fund its operations from internal accruals.

The airline’s result was weaker than the Street estimates. Analysts polled by Bloomberg had estimated revenue of ~5,024 crore and adjusted net loss of ~334 crore, respectively, for the third quarter.

Interglobe Aviation plans to ramp up capacity quickly to return to profitability, the airline management said.

Indigo’s deployed capacity was 40 per cent lower in the third quarter and load factor fell to 72 per cent from 87.6 per cent YOY. The company also witnessed volatility in demand and revenue in December on the back of adverse news flow, but it expects revenue to stabilise. It sees growth in nonmetro markets and an uptick in corporate travel segment.

The airline’s Chief Executive Officer, Ronojoy Dutta, said it was critical to increase aircraft utilisation to turn profitable and the airline hopes to restore 100 per cent domestic capacity by April and 50 per cent of international capacity by mid-2021.

Dutta said the civil aviation ministry was in discussions with governments of Sri Lanka and Saudi Arabia for resumption of services and these countries could open up for flights in the next few weeks. While its fleet count is expected to reduce as it returns older Airbus planes, overall capacity would be higher with the induction of more 222-seater Airbus A321 planes.

Chief Commercial Officer Sanjay Kumar said the airline was seeing positive response from the corporate sector, especially from pharma, auto, and construction segments. The demand from information technology and consultancy firms is yet to pick up. Also metro to non-metro routes and markets such as Chandigarh, Patna, and Srinagar are doing well, he said.

In the nine months of current financial year, the airline raised liquidity of ~5,400 crore, and is on the track to raise another ~1,200 crore in fourth quarter as per the guidance, Chief Financial Officer Aditya Pande said.