IndiGo flies with 24% rise in profit

Rise in net profit was achieved on account of reduction in non-fuel expenses, strengthening of the rupee and rise in passenger load factor

InterGlobe Aviation, which runs the country’s largest airline, IndiGo, on Tuesday reported a 23.6 per cent rise in net profit on account of reduction in non-fuel expenses, strengthening of the rupee and a rise in passenger load factor.
 
Net profit for the September quarter (Q2) of the financial year 2016-17 was Rs 139.8 crore against Rs 113.1 crore in the same period last year. The total income from operations increased by 17 per cent to Rs 4,166.9 crore against Rs 3,539.9 crore in the same period the previous year, even though yields continued to remain under pressure due to fare war in the domestic market, falling by 11.1 per cent, as compared to the corresponding period last year.
 

IndiGo President Aditya Ghosh said the airline was able to reduce non-fuel cost significantly to increase profitability. Chief Financial Officer Rohit Philip said, “Reduction in exchange rate, lower finance cost and higher utilisation rate for aircraft helped us to reduce our costs.”
 
Fuel expense increased by 24.9 per cent to Rs 1,552.3 crore against Rs 1,242.1 crore in the same period last year to increase in capacity.
 
The airline significantly increased capacity, adding nine aircraft during the quarter and it had maintained that it would have 136 aircraft by the end of this financial year.
 
Out of these, 20 will be A320 neo. The management said it would lead to capacity increase with Available Seat per Kilometre (ASK) growing by 30 per cent each in the next two quarters. On being questioned on the effect on yield, Ghosh said that with India being a growing market in a long term, the balance would be restored.
 
Currently, the airline has and 430 A320neo on order.
 
For the quarter, passenger revenues were Rs 3,597.9 crore, an increase of 18 per cent, while ancillary revenues were Rs 558.4 crore, a rise of 17.7 per cent as compared with the same period last year, the airline said.
 
President Aditya Ghosh said that there was a significant chance of increase in load factor as the October-December period was traditionally considered to be a stronger quarter.