RE­SULTS OF IN­DIGO’S FIRST QUAR­TER OF FY2018-19

SP's Airbuz - - News Briefs -

In­dia’s largest do­mes­tic car­rier, In­diGo, has sent tremors in the avi­a­tion com­mu­nity with its first quar­ter re­sults for the fi­nan­cial year 2018-2019 which will end on March 31, 2019. Rev­enues were higher by 14.5 per cent com­pared to the same quar­ter last year; but costs rose by 40.5 per cent for the same pe­riod. The in­crease in costs is driven by three pil­lars of fuel, for­eign ex­change and fleet. Earn­ings Be­fore In­ter­est Taxes De­pre­ci­a­tion Amor­ti­sa­tion and Rentals (EBITDAR) mar­gins com­pressed 16.7 per cent while profit de­clined 13.7 per cent. The over­all profit de­clined by 96.6 per cent com­pared to the same quar­ter last fis­cal. Yields for the quar­ter were down 5.4 per cent and only par­tially off­set by higher pas­sen­ger load fac­tors. In­diGo made up a frac­tion of the rev­enue loss per seat by sell­ing more seats. Against a fall­ing yield en­vi­ron­ment, In­diGo’s costs grew, driven largely by ris­ing global fuel costs and the weak­ness of the In­dian Ru­pee. Fuel costs rose by 54.4 per cent with fuel con­sti­tut­ing 40.1 per cent of the air­line’s to­tal costs. Em­ployee ex­penses also grew by 11.9 per cent re­flect­ing or­gan­i­sa­tional build up and costs re­lated to tal­ent at­trac­tion, re­ten­tion and other ben­e­fits.

In­diGo used to re­turn its air­craft af­ter about six years and thus avoid the ex­pen­sive ‘C’ and ‘D’ checks. With de­lays in the A320­neo de­liv­er­ies, In­diGo ex­tended leases on their ex­ist­ing ceo air­craft and is hit with th­ese ex­pen­sive checks. To add to the woes, the weak­ness of the Ru­pee mag­ni­fied the main­te­nance costs im­pact as In­diGo gets most main­te­nance done over­seas.

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