New Delhi: Budget carrier IndiGo’s parent InterGlobe Aviation on Tuesday reported a 294% increase in net profit to Rs551.55 crore, helped by credits received from manufacturers for aircraft delivery delays and grounding, besides better revenue management.
The airline had reported a net profit of Rs139.85 crore in the same period a year ago. Total revenue rose 27.2% to Rs5,505.56 crore from Rs4,166.93 crore a year earlier, the airline told BSE after market hours.
IndiGo, which has bought more than 400 A320neos, has seen the planes suffer engine snags and grounding, as also delays in plane deliveries. “Credits received from manufacturers related to aircraft grounding and delivery delays" helped profits, the airline said in an investor presentation.
In an analyst call, IndiGo chief financial officer Rohit Philip declined to give the quantum of credits. IndiGo operates Airbus A320neo jets are fitted with Pratt & Whitney engines.
The airline’s other income rose 33.5% to ₹ 214.6 crore.
Philip said he did not see the credits continuing as normalcy returns. The airline expects to take 12-15 months to resolve issues with the Pratt & Whitney engines.
The other key reason for improved revenues was “better automated system, better people, more analytics", airline president Aditya Ghosh said on the same call.
Philip said IndiGo wasn’t inventing anything new but incorporating what global airlines do—moving from manual revenue management to automated processes.
IndiGo, which will launch regional operations in December, is looking to own the ATR turboprop regional planes, using the cash it generated from a recent share sale to meet promoter holding norms. While Philip did not specify how much the ATR setup would cost, he said it “won’t change profitability significantly".
IndiGo will receive its first A321neo in October next year. The planes, which can carry more people, can be used at congested airports like Mumbai and Delhi. The airline said it was facing challenges in obtaining slots at the major airports during peak times, but has runway left to tap dozens of other airports for its incoming planes.
The airline’s fuel expenses rose 6% to Rs1,647.3 crore, while aircraft and engine rentals also rose 6%to Rs819.3 crore during the quarter.
Other expenses jumped 31.6% to Rs1,455 crore, while finance cost rose over 40.5% to Rs85.7 crore. Cash balance rose 88.5% to Rs12,92.56 crore from Rs685.72 crore. Debt declined 7.5% to Rs253.68 crore from Rs274.28 crore.
IndiGo has about 38% of the domestic aviation market with about 141 planes and 913 daily flights.
Shares of IndiGo rose 1.59% on BSE on Tuesday to close at Rs1,244.30 on a day when the benchmark Sensex index fell 0.16% to close at 33,213.13 points.
Jet Airways (India) Ltd and SpiceJet Ltd are expected to announce their results in the coming weeks.