HIGH PROFITS BY INDIGO

India’s largest domestic carrier, IndiGo Airlines reported results for the second quarter of the fiscal year 2017-2018 that surpassed expectations. IndiGo has always been well positioned to capitalise on market growth. Financial performance was driven by market growth, better yield management and also a strong focus on cost control. Interestingly, the second quarter is traditionally a weak quarter for airlines. Most airlines tend to schedule their maintenance in this quarter to reduce capacity. This was the case for IndiGo as well and the weakness is seen in the comparative analysis with the previous quarter. The higher yields in the second quarter indicate that more people are flying and the aviation growth story of India remains strong.

IndiGo confirmed that all its NEO aircraft are now flying and the total fleet as of the end of the quarter consisted of 141 aircraft including 24 NEOs. The more fuelefficient A320neo’s constitute 17 percent of the IndiGo fleet and this is providing the airline a positive effect on fuel burn and its resultant costs. For the quarter, engine manufacturer Pratt & Whitney also provided compensation. While exact details of the compensation are not disclosed, IndiGo confirms that the compensation related to NEO groundings, delivery delays and also loss of profitability due to delayed induction, has been received. Additionally, IndiGo only confirmed that the compensation received was included both in revenue and cost items. Estimates indicate that this compensation was in the range of 150 to 200 crore for the quarter.