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IndiGo Q4 reported net loss widens to Rs 1,681 crore
IndiGo shares gained 9.94% to hit an intraday high of ₹1,808.5 on the BSE even after its consolidated net loss widens to ₹1,681 crore in Q4FY22

IndiGo Q4 net loss widens to Rs 1,681 cr, revenue rises 29% - BusinessToday
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Interglobe Aviation which operates low-cost carrier IndiGo, on Wednesday said its losses widened to Rs 1,681.80 crore in the March quarter compared with Rs 1,147.20 crore in the corresponding quarter last year.

This is even as total income for the quarter jumped 29 percent YoY to Rs 8,207.50 crore from Rs 6,361.80 crore in the same quarter last year.

Ebitda (earnings before interest, taxes, depreciation, amortization, and restructuring or rent cost) for the quarter fell 73.50 percent YoY to Rs 171.80 crore from Rs 648.30 crore. Ebitda’s margin plunged 830 basis points to 2.1 percent from 10.4 percent.

Fuel expenses surged over 68% to Rs 3,220.58 crore against Rs 1,914.46 crore a year ago. Overall costs; however, rose 32% to Rs 9,885 crore during the same period.

So far this year, Brent crude has surged 50% while in the March quarter it gained nearly 39%.

Impact on result

Q4 was impacted by the Omicron Covid wave, which hampered demand at the beginning of the quarter. Capacity in terms of available seat kilometers (ASK) dropped sequentially by 11.3% but grew by 6% y-o-y.

While demand rebounded, later on, higher aviation turbine fuel costs and the depreciating rupee weighed on profitability.

Yield, a measure of pricing, remained stable sequentially at Rs4.4. But the cost per available seat kilometer (CASK) increased by 24% y-o-y and 19% sequentially.

The upshot is that IndiGo’s spreads, which is revenue per available seat kilometer less CASK, slipped into negative territory, according to a company presentation. Recall that spreads had turned positive in Q3 after seven quarters of being negative.

CEO Words

“This quarter has been difficult because of the demand destruction caused by the Omicron virus in the first half. Although traffic rebounded and demand was robust during the latter half of the quarter, we were challenged by high fuel costs and a weakening rupee”, said Ronojoy Dutta, CEO of Indigo.

Dutta further said that the company believes IndiGo is best positioned to maximize revenue in a recovering market. “As we work to return the airline to profitability, we are focused on maintaining our cost leadership position and continuing to build the most efficient network in the region”, the CEO added.

The airline’s fleet, comprising 41 A320ceos, 143 A320neos, 56 A321neos, and 35 ATRs, operated a peak of 1,577 daily flights, including non-scheduled flights, during the quarter.

The firm said it sees the first quarter of the fiscal year 2023 capacity to increase by around 150% while for the whole fiscal. It expects capacity to increase by around 55-60%.

As of 31 March, IndiGo had a total cash balance of Rs 18,227.5 crore. While the airline’s total debt (including the capitalized operating lease liability) stood at Rs 36,877.80 crore.