IndiGo profit up, to seek long haul routes

InterGlobe Aviation Ltd, which operates India’s biggest budget airline IndiGo, said its fiscal third-quarter profit rose 56.4% helped by foreign exchange gains and income from plane manufacturer.

The airline also announced it will seek rights for long haul international routes soon.

Net profit rose to ₹762 crore in the three months ended December 31 from ₹487.25 crore in the year earlier.

Analysts had pegged the bottom line at ₹651 crore, according to Bloomberg.

Total income increased 25% to ₹6,449.79 crore from ₹5,158.42 crore in the year-ago period as the company added planes and operated more flights.

The revenue from operations was up 23.9% to ₹6,177.88 crore. Its other income was up 58.2% to ₹271.9 crore. Foreign exchange gains stood at ₹80.3 crore. Costs shot up 18% while fuel costs jumped 20.6%.

IndiGo which flies to Middle East and South East Asia will now seek rights from the government to fly long haul international even as it continues to look at the Air India sale closely.

“We are still awaiting details of the process. We remain interested in acquiring international operations of Air India but as we have said previously we will explore long haul opportunities with or without Air India. In that context we will start seeking route rights and other necessary regulator approvals as may be required to operate long haul flights,” IndiGo President Aditya Ghosh said during an evening analyst call. .

Will the airline look at long -haul in the next 12 months?

“We will go ahead and apply for some route rights, a lot depends on what happens after that,” Ghosh said.

IndiGo controls about 39.6% share of the domestic market, with 153 planes and over 1,000 daily flights to 49 cities.

IndiGo’s chief finance officer Rohit Philip said the dividend pay out will be done by the airline end of the fiscal and is likely to be lower than in the past as cash would be needed for buying Airbus A320 planes.

IndiGo has a cash balance of Rs 13887.35 crore while the total debt stood at Rs 2432.635 crore.

The airline said it has started getting regular flow of new engines from Pratt & Whitney to replace those that develop snags and all its A32neos are now “actively flying”.

It did not provide the credits it received from Pratt & Whitney in lieu of the snags issues.

The airline’s stock soared 3.7% to ₹1,237.90 on the Bombay Stock Exchange (BSE).

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