INDIGO Q1FY20 RE­SULTS

SP's Airbuz - - Newsbrief -

In the last week of Oc­to­ber this year,

IndiGo Air­lines re­ported its Q2FY20 re­sults re­flect­ing a loss of ` 1,062 crore as against a profit of ` 1,203 crore in the pre­vi­ous quar­ter. The huge loss in the sec­ond quar­ter was un­doubt­edly sur­pris­ing. Over­all this was one of the few in­stances where the cost of fly­ing each seat (CASK) ex­ceeded the rev­enue earned per seat (RASK) by 0.40. That is, the air­line lost 40 paise for each seat it flew each kilo­me­tre. Take the to­tal ca­pac­ity flown of 24.2 bil­lion ASKs and the op­er­a­tional loss fig­ure is clear. The quar­ter also wit­nessed two ar­bi­tra­tion cases filed by one of the pro­mot­ers Rahul Bha­tia as a part of the on­go­ing dis­pute in the man­age­ment. The dis­pute as it re­lates to im­pact to the com­pany seems to be set­tled for now. The An­nual Gen­eral Meet­ing (AGM) saw sev­eral pro­pos­als be­ing ap­proved and im­ple­mented – many of them be­ing the ones that were high­lighted as a mat­ter of con­cern in the pro­moter dis­pute.

The quar­ter saw IndiGo launch a num­ber of in­ter­na­tional routes in­clud­ing to China, Mid­dle East, Hong Kong and Viet­nam. This con­tin­ues to be a fo­cus area and for the half-year, ap­prox­i­mately 50 per cent ca­pac­ity has been de­ployed on in­ter­na­tional routes. These routes take time to ma­ture and the im­pact has been seen in the op­er­a­tional cash-flow. Ad­di­tion­ally, not all in­ter­na­tional routes are a net pos­i­tive. Much like the Is­tan­bul flight which con­tin­ues to see chal­lenges – for some of the routes the sec­tor length is far too long. This eats into the cost base as crews can­not be flown back, the yields are lower com­pared to the full-ser­vice car­ri­ers.

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