IndiGo quarterly earnings to be materially impacted as COVID-19 spreads

Low-cost airline IndiGo said on Thursday its quarterly earnings will take a hit as daily bookings decline by 15 to 20 per cent with coronavirus spreading across the world.

"In addition, the rupee has also depreciated sharply which will have an adverse impact on our dollar-denominated liabilities primarily on account of capitalised operating leases," it said in a statement.

IndiGo experienced a modest impact from the coronavirus in January and February. It cancelled flights to China and Hong Kong and reduced frequency to certain other southeast Asia markets.

This capacity was redeployed in other markets without having a material impact on revenues, said the airline which operates over 1,600 daily flights.

"Over the past few days, however, we have seen a 15 to 20 per cent decline in our daily bookings. Please note that the numbers could change from here based on how the situation evolves," said IndiGo.

"We expect our quarterly earnings to be materially impacted," it added.

In the October to December quarter (Q3 FY20), the budget carrier clocked revenue from operations of Rs 9,932 crore, marking an increase of 25.5 per cent against 19.3 per cent increase in capacity compared to the same period last year.

At the end of December 2019, IndiGo had a fleet of 257 aircraft, of which 126 were A320ceo, 96 A320neo and 10 A321neo besides 25 ATRs.

The International Air Transport Association (IATA) has said the global air transport industry could see 113 billion dollars of revenue losses for the passenger business in 2020 as novel coronavirus (COVID-19) snowballs into a public health emergency.

IATA's Director General and CEO Alexandre de Juniac says the turn of events as a result of Covid-19 is almost without precedent. In little over two months, the industry's prospects in much of the world have taken a dramatic turn for the worse.