IndiGo profit falls 25% to ₹440 cr; airline to buy 50 ATR planes

IndiGo’s parent InterGlobe Aviation on Tuesday reported a nearly 25% decline in profit at ₹440.31 crore in the fourth quarter ended March 2017 as higher expenses took a toll on its bottom line.

The country’s largest airline in terms of market share had a profit after tax of ₹583.78 crore in the same period a year ago. The carrier had revenues from operations to the tune of ₹4,848.22 crore during the latest JanuaryMarch quarter.

In the year-ago period, the same stood at ₹4,090.68 crore, according to a release.

On the back of steep rise in fuel costs, the company’s total expenses in the fourth quarter of last fiscal jumped nearly 31% to ₹4,523.04 crore.

The total expenses stood at ₹3,458.20 crore in the same period a year ago.

According to the release, fuel costs in the fourth quarter surged 71% to ₹1,750.51 crore.

“For the last quarter, despite a 38% year-over-year increase in fuel prices, we have reported a profit after tax of ₹440 crore,” IndiGo president and whole time director Aditya Ghosh said.

The company’s board has recommended a dividend of ₹34 per share for the fiscal 2017.

The airline also announced plans to purchase 50 ATR turboprop aircraft and said it will start operations with these planes by the year end, in a move to tap the regional aviation market.

This would be the first time that the leading carrier would be acquiring ATR 72-600 planes, which generally have a seating capacity for 70 people.

The term sheet is subject to reaching a mutually satisfactory final purchase agreement with ATR and the engine manufacturer, it said in a release.

“Assuming that both the intended final purchase agreement are reached, IndiGo plans to launch its turbo-prop operation at the end of calendar 2017 and expects to induct up to 20 ATR aircraft by December 2018,” the release said.