IndiGo delivered another profitable quarter of capacity growth as 2023 ended, despite a significant proportion of its Airbus A320neo-family fleet being grounded.
The Indian low-cost carrier has aircraft numbering in the “mid-70s” out of service today, it said during a fiscal third-quarter earnings call on 2 February, from a total fleet of around 360 aircraft. Those groundings are of A320neo-family aircraft that are either waiting for parts due to supply-chain challenges or undergoing inspections after Pratt & Whitney’s recall of hundreds of PW1100G engines.
“We are hopeful that the situation will start to improve in a few quarters from now,” says IndiGo chief financial officer Gaurav Negi.
The carrier notes that it continues to offset the groundings using a range of mitigation measures, including holding on to older aircraft for longer and the short-term leasing of more jets. It also continues to receive new aircraft, with one delivery a week expected in the fiscal year beginning April 2024.
While it does not offer capacity guidance on that fiscal year, it is maintaining its guidance of 20% growth in the current fiscal year, including 12% in January-March 2024 period.
Amid the challenging capacity environment, IndiGo recorded its fifth consecutive profitable quarter for the three months ended 31 December 2023.
Operating revenue was up 30% year on year at Rs195 billion ($2.4 billion), helping it to an EBITDAR of Rs54.8 billion – a margin of 28.1%.
Its profit after tax of Rs30 billion was double that achieved in the quarter ending December 2022.
The carrier notes it is receiving compensation relating to the grounded aircraft.
IndiGo’s capacity measured in available seat kilometres was some 27% higher during the period, while its traffic measured in revenue passenger kilometres was up 28%.
It says that yields are holding up and are expected to continue doing so in the next fiscal year, particularly given the tight capacity situation.
