IndiGo Q3 profit up 53 Percent as Air Travel Demand grows in India
By siliconindia | Monday, 05 February 2024, 12:46:27 PM IST
IndiGo, India's largest airline, announced a profitable performance for the fifth consecutive quarter, benefiting from a greater share of passenger traffic. In the three months ending on December 31, net income surged by 53 percent to 29.98 billion rupees ($362 million), exceeding the analyst consensus estimate of 21.27 billion rupees. The airline's third-quarter revenue exceeded expectations at 194.5 billion rupees, marking a 30 percent increase from the same period a year ago. Despite an 18 percent rise in fuel costs, IndiGo expanded its seat capacity by 26.8 percent during the quarter.
IndiGo is ramping up capacity to seize a bigger chunk of what is one of the world's fastest-growing aviation markets. Its already large share, currently at 62 percent, has been growing considering rival SpiceJet Ltd. is struggling financially, while another budget carrier Go Airlines filed for insolvency and stopped operations in May. IndiGo last year made a 500-plane purchase from Airbus SE, a move that could help protect its position from an expanding Air India Ltd.
The number of IndiGo's aircraft out of service has risen to the "mid-70s" from 40 in the previous quarter, primarily due to mandatory inspections of Pratt & Whitney GTF engines, according to Chief Financial Officer Gaurav Negi during an earnings call. To avoid a capacity shortage, the airline plans to rely on wet leasing aircraft. Despite these challenges, IndiGo aims to increase seat capacity by 12 percent in the fourth quarter compared to the previous year. The airline transported 24.3 million passengers from October to December, marking a 23 percent increase compared to the corresponding period the previous year, as reported by the country's aviation regulator.
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