IndiGo’s Q3 profit soars 56%, eyes long-haul international flights

New Delhi: InterGlobe Aviation Ltd, which operates India’s biggest budget airline IndiGo, said its Q3 profit rose 56%, boosted by foreign exchange gains and credits from Pratt & Whitney to compensate for glitches in engines that grounded the airline’s Airbus planes.

The airline said it will seek rights to fly long-haul international flights soon.

Net profit rose to Rs762 crore in the three months ended 31 December from Rs487.25 crore in the year earlier. Analysts surveyed by Bloomberg had expected quarterly profit at Rs651 crore.

Total income increased 25% to Rs6,449.79 crore from Rs5,158.42 crore in the year-ago period as the airline added planes and operated more flights.

Revenue from operations rose 24% to Rs6,177.88 crore. Other income surged 58% to Rs271.9 crore. Foreign exchange gains stood at Rs80.3 crore.

Fuel costs, which account for 30-40% of the company’s total expenditure, jumped 20.6% as the airline added flights and crude oil prices surged.

IndiGo which flies to West Asia and South-east Asia, will seek rights from the government to fly long-haul international flights, even as it expressed interest in acquiring the international operations of Air India, the state-run airline that is in the process of being privatized.

“We are still awaiting details of the process. We remain interested in acquiring international operations of Air India but as we have said previously, we will explore long-haul opportunities with or without Air India. In that context, we will start seeking route rights and other necessary regulator approvals as may be required to operate long-haul flights,” IndiGo president Aditya Ghosh said during a conference call with investors.

IndiGo controls 39.6% share of the domestic market, with 153 planes and over 1,000 daily flights to 49 cities.

IndiGo’s chief financial officer Rohit Philip said the dividend payout will be done by the airline at the end of the fiscal and is likely to be lower than in the past as it will need to retain cash to fund purchases of Airbus A320 planes.

IndiGo had a cash balance of Rs13,887.35 crore at the end of December while its total debt was at Rs2,432.635 crore.

The airline said it has started getting regular flow of new engines from Pratt & Whitney to replace those that had developed snags and all its A320neos are now operational. The airline declined to give details of the credits it received from Pratt & Whitney during the call.

The airline’s stock surged 3.7% to Rs1,237.90 on the BSE, while the exchange’s benchmark Sensex gained 0.06% to close at 36,161.64 points.

Separately, the aviation ministry announced on Wednesday that IndiGo and Jet Airways (India) Ltd have won rights to fly 20 and four regional routes under the UDAN regional connectivity scheme, respectively. Air India and SpiceJet Ltd, too, won rights to fly UDAN flights.

Civil aviation secretary R.N. Choubey said this round of UDAN will connect 43 airports and helipads.

UDAN partly subsidizes the flights through a cess on flights to metro cities. It will cost the government about Rs800 crore annually, some of which is being recovered through an UDAN cess on metro flights.