The airline, which is awaiting approval for its IPO, gave its financial results to the Directorate General of Civil Aviation on Thursday.
The latest filing indicates the airline’s net profit in the March quarter of 2014-15 stood at Rs 584 crore. In the nine months ended December 2014, IndiGo had made a net profit of Rs 720 crore.
On a full-year basis, the airline’s revenue rose 22 per cent — from Rs 11,432 crore in 2013-14 to Rs 13,925 crore. Profit before tax rose to Rs 1,847 crore from Rs 471 crore the previous year.
IndiGo President Aditya Ghosh said the airline in 2014-15 added 22 per cent capacity, more than in any previous year. “The profit is driven by low fuel costs, better yields and passenger growth,” he said.
The airline’s critics have claimed that its profits are a result of sale and leaseback transactions.
IndiGo has also been able to keep its lease rents low, adjusting purchase incentives it earns from Airbus and component makers. The incentives are amortised over the lease period and adjusted against lease payments each year. In 2013-14 and the first nine months of 2014-15, the airline earned, respectively, Rs 360 crore and Rs 264 crore in cash and non-cash incentives.
Ghosh denied that the airline’s profits in 2014-15 were on account of manufacturer incentives or sale and lease-back transactions.
“After November 2014, we did not add new planes; so, not all our capacity addition was by way of sale and leaseback transactions, and yet this has been our most profitable year. Whatever gains we make, we amortise over the entire lease period,” Ghosh said.
The airline has a lower unit cost than its peers, because it operates a single type of fleet and has lower maintenance costs. Also, the airline has stuck to its business model and not gone for multiple fleet types or reconfiguration to planes to add business-class seats. Two mega aircraft orders and ‘power by the hour’ maintenance contracts have enabled the airline to keep the costs low and predictable.
Ghosh remarked that any airline could claim to be a low-fare airline, but IndiGo had the lowest costs in the segment, and this enabled the airline to achieve profitability.
“We do not chase market share, and we do not drop fares or go for flash sales. Passenger growth will happen as we add capacity,” he said, adding the airline was consistently targeting profitable growth.