Profit up, Indigo to seek long haul routes

NEW DELHI: Interglobe Aviation Ltd, which operates India’s biggest budget airline Indigo, said its fiscal third-quarter profit rose 56%, boosted by foreign exchange gains and credits from Pratt & Whitney to compensate for glitches in engines that grounded the airline’s Airbus planes.

The airline said it will seek rights to fly 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 surveyed by Bloomberg had expected quarterly profit at ₹651 crore.

Total income increased 25% to ₹6,449.79 crore from ₹5,158.42 crore in the year-ago period as the airline added planes and operated more flights. Revenue from operations rose 24% to ₹6,177.88 crore. Other income surged 58% to ₹271.9 crore. Foreign exchange gains stood at ₹80.3 crore.

Fuel costs, which account for 30-40% of the company’s total expenditure, jumped 20.6% as the airline added flights and crude oil prices surged.

Indigo which flies to West Asia and South-east Asia, will seek rights from the government to fly long-haul international flights, even as it expressed interest in acquiring the international operations of Air India, the state-run airline that is in the process of being privatised.

“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 a conference call with investors. Indigo controls 39.6% share of the domestic market, with 153 planes and over 1,000 daily flights to 49 cities.

Indigo’s chief financial officer Rohit Philip said the dividend payout will be done by the airline at the end of the fiscal and is likely to be lower than in the past as it will need to retain cash to fund purchases of Airbus A320 planes.

Indigo had a cash balance of ₹13,887.35 crore at the end of December while its total debt was at ₹2,432.635 crore.

The airline said it has started getting regular flow of new engines from Pratt & Whitney to replace those that had developed snags and all its A32neos are now operational. The airline declined to give details of the credits it received from Pratt & Whitney during the call.

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