IndiGo slips back into the red with wider net loss in Q4; revenue climbs 29%

InterGlobe Aviation, the parent of budget airline IndiGo, posted strong topline numbers for the fourth quarter despite the spread of the Omicron variant of coronavirus during the first few weeks but slipped back into the red as a sharp spike in jet fuel cost due to the war in Europe hit margins.

India’s biggest airline posted a net loss of Rs 1,682 crore for the quarter ended March 31, compared with a loss of Rs 1,147 crore a year earlier.

This came after the firm surprised the street by swinging into the black after several quarters of losses in the previous quarter ended December 31, 2021 with a net profit of Rs 129.8 crore.

Excluding foreign currency loss of Rs 612.3 crore, net loss for the fourth quarter aggregated to Rs 1,069.5 crore.

IndiGo’s revenue rose 29% to Rs 8,020.7 crore from Rs 6,222.9 crore in the year-ago period. On a sequential basis, however, revenue slipped from Rs 9,294.8 crore in the peak year-end holiday and festive season.

The company’s share price declined 2.38% to Rs 1,642.5 apiece in a weak Mumbai market on Wednesday.

Other Key Highlights

1) EBITDAR came at Rs 171.8 crore with EBITDAR margin of 2.1%, compared with EBITDAR of Rs 648.3 crore with a margin of 10.4% for the same period last year.

2) On a sequential basis, EBITDAR sank from Rs 1,995.5 crore with a margin of 21.5% for the quarter ended December 31, 2021.

3) Average seat kilometer (ASK) rose 6.3% YoY but declined 11.2% sequentially to 20.4 billion.

4) Load factor rose to 76.7% during the quarter from 70.2% in Q4 FY21 but declined from 79.7% in the preceding quarter.

5) Fuel cost rose 68.2% YoY to Rs 3,220.6 crore during the quarter, which affected the bottom-line despite strong revenue growth.

Management Commentary

Ronojoy Dutta, CEO of IndiGo, said the fourth quarter had been difficult because of the demand destruction caused by the Omicron variant 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,” he said.

“We believe IndiGo is best positioned to maximise 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,” Dutta added.