SP's Airbuz



Indigo’s fourth quarter results were far below expectatio­ns, reflecting the intensely competitiv­e market, somewhat irrational market as also Indigo’s challenges as it continues on its path of growth. Analysis of the fourth quarter results is reflective of certain trends in the market which saw financials of the airline trending adversely. Revenues were higher by 19 per cent compared to the same quarter last year but costs rose by 30 per cent for the same period. EBITDAR margins saw a compressio­n of 8.1 per cent while profit margins saw a decline of 7.1 per cent. The overall profit was 73 per cent lower than the same quarter last year.

The quarter was market by intense yield pressures. Specifical­ly, the pricing power in the market was diminished. Against a falling yield environmen­t, costs for Indigo grew largely driven by fuel costs and also weakness of the rupee. Fuel costs rose by 10.2 per cent with fuel constituti­ng 40.1 per cent of the airlines total costs. Indigo added six aircraft during the quarter however, the quarter also saw the grounding of the Airbus A-320neo fleet. Capacity addition compared to the previous quarter was a mere five per cent. In the fourth quarter of the previous financial year, capacity addition was 20 per cent. The airline continued its strategy of dominating cities including where it flies its regional jets.

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