IndiGo flies into the red on Covid curbs, posts loss of Rs 2,843 cr in Q1

Posts loss of Rs 2,843 cr in Q1FY21 against PBT of Rs 1,509 cr Q1FY20

India’s largest airline IndiGo on Wednesday said it expected to increase capacity by 40 per cent in the September quarter (Q2) and, by the December quarter, it wants to be able to deploy 60 per cent of the capacity it operated during the same period last year. 

The airline posted a pre-tax loss of Rs 2,842.6 crore against a pre-tax profit of Rs 1,509.4 crore in the same quarter of last year. Net loss was at Rs 2,844.3 crore for Q1 – the largest ever for the airline. It had posted a profit of Rs 1,203 crore in the same quarter last year. 

Revenue from operations plunged 91.9 per cent year-on-year to Rs 766.7 crore in Q1. Total income was Rs 1,143.8 crore, a decrease of 88.3 per cent over the same period last year. Passenger ticket revenues dipped 93.1 per cent year-on-year to Rs 585.4 crore. Similarly, ancillary revenues fell 81.3 per cent year-on-year to Rs 168.8 crore.

In a post results call with analysts, Chief Executive Ronojoy Dutta said: “There is volatility in demand. The first part of June after reopening was going strong but then it started changing as number of Covid-19 cases went up.” He said pocket lockdowns were proving to be a hurdle. 

India imposed a two-month lockdown on 23 March, during which flights were not allowed to operate. "The aviation industry is going through a crisis of survival and, therefore, our cash balance remains our number one priority. We have built a strong team, which is working on multiple fronts to ensure that we emerge from this crisis stronger than ever," Dutta said.

He wants the government to remove air fare caps as it would allow companies to price tickets according to demand and supply. “Price of a morning ticket cannot be similar to the price of an afternoon one. We should be able to leverage that and attract demand,” Dutta said.

The company said it would not pay any dividend to its shareholders for the financial year ended 2020. This, along with other cost-saving steps, like sale and leaseback of owned aircraft, and reduction in salary cost, among others, would help the company generate liquidity of around Rs 4,000 crore.