IndiGo Posts Q2 Rs 2.58B Loss Due to Forex Hit; Revenue Up 9%

IndiGo Reports Significant Q2 Loss Amid Forex Challenges
InterGlobe Aviation, operating as IndiGo, announced a net loss of Rs 2,582 crore for the quarter ending September 2022 (Q2). The airline attributed a substantial portion of this loss to a foreign exchange (forex) impact of Rs 1,203.1 crore. Despite the significant loss, the airline’s revenue from operations saw a robust increase of 9% year-on-year, reaching Rs 12,497.5 crore, driven by strong passenger demand. The results, declared on October 28, 2022, also highlighted growing cost pressures, particularly from elevated fuel prices and a weakening Indian rupee.

Operational Growth and Rising Costs
During the second quarter of the fiscal year 2023, IndiGo experienced considerable operational expansion. Available seat kilometers (ASKs) grew by 30.6%, and the number of passengers carried surged by 75.8% to 19.7 million. The airline’s load factor improved to 79.2% in Q2FY23, up from 71.9% in the same quarter last year, indicating better capacity utilization. Yield, a key revenue metric, increased by 21.0% to Rs 5.07. However, these gains were partially offset by significant cost increases. Fuel prices rose by 67.2% year-on-year, directly impacting operational expenses. The depreciation of the rupee against the dollar further exacerbated costs, contributing to the substantial forex loss.

Fleet Expansion and Future Outlook
IndiGo’s fleet stood at 279 aircraft as of the end of September 2022, comprising 38 A320 CEOs, 155 A320 NEOs, 73 A321 NEOs, and 13 ATRs. The airline has a substantial orderbook of 450 planes. Expanding its network, IndiGo launched Ras Al Khaimah as its 6th Middle East destination, bringing its total destination count to 100, split between 76 domestic and 24 international routes. For the third quarter of FY23, IndiGo anticipates increasing its capacity, measured in ASKs, by 21-23% year-on-year. The airline’s management expressed optimism regarding the strong passenger traffic and expected continued healthy demand in the upcoming quarter. As of September 30, 2022, IndiGo maintained a total cash balance of Rs 18,174.9 crore, including Rs 9,141.7 crore of free cash and Rs 9,033.2 crore of restricted cash. The airline’s total debt, including capitalized operating lease liability, amounted to Rs 40,020.2 crore, with operating lease liability itself being Rs 38,245.5 crore. Capital expenditure for the period was Rs 1,498.4 crore.

Key Points

• Net loss for Q2 ending September 2022: Rs 2,582 crore
• Foreign exchange loss: Rs 1,203.1 crore
• Revenue from operations: Rs 12,497.5 crore
• Revenue increase year-on-year: 9%
• Available seat kilometers (ASKs) increase: 30.6%
• Passengers carried: 19.7 million
• Passenger increase: 75.8%
• Load factor (Q2FY23): 79.2%
• Load factor (Q2FY22): 71.9%
• Yield increase: 21.0%
• Yield per passenger: Rs 5.07
• Capacity guidance for Q3FY23 (ASKs increase): 21-23% year-on-year
• Fleet size: 279 aircraft
  • 38 A320 CEOs
  • 155 A320 NEOs
  • 73 A321 NEOs
  • 13 ATRs
• Aircraft orderbook: 450 planes
• Total destinations: 100
  • Domestic destinations: 76
  • International destinations: 24
• Cash balance: Rs 18,174.9 crore
  • Free cash: Rs 9,141.7 crore
  • Restricted cash: Rs 9,033.2 crore
• Capital expenditure (capex): Rs 1,498.4 crore
• Total debt: Rs 40,020.2 crore
• Operating lease liability: Rs 38,245.5 crore
• Fuel prices increase year-on-year: 67.2%

Read the Complete Article.