IndiGo reports record quarterly net loss of ₹2,844.3 crore in Q1 on account of covid-192 min read . Updated: 29 Jul 2020, 08:14 PM IST
The company reported a net loss of ₹2,844.3 crore for the June quarter, after reporting a profit of ₹1203.14 crore during the same quarter of the previous year
New Delhi: InterGlobe Aviation Limited, which operates the country's largest airline, reported its largest quarterly loss during the three months that ended on 30 June, due to muted demand, amidst lockdown and travel restrictions, caused by the covid-19 pandemic.
The company reported a net loss of ₹2,844.3 crore for the June quarter, after reporting a profit of ₹1203.14 crore during the same quarter of the previous year.
The airline's total revenue fell by 88.3% during the March quarter to ₹1,143.82 crore.
The airline's expenses however dropped by 51.8% to ₹3,986.40 crore during the April-June 2020 period as it didn't operate any scheduled commercial flights for nearly two months.
Scheduled commercial airline operations were grounded for two months starting from 25 March. IndiGo operated only charter and cargo flights during a large part of the June quarter before domestic operations were resumed in a calibrated manner on 25 May.
At present, domestic airlines are allowed to operate upto 45% of its capacity.
Closure of scheduled operations till 24 May and lower capacity deployment thereafter on account of covid-19, significantly impacted the quarterly results, IndiGo said in a statement.
“The aviation industry is going through a crisis of survival and therefore, our cash balance remains our number one priority," the company's chief executive Ronojoy Dutta said in the statement.
At the end of 30 June, IndiGo had a total cash balance of ₹18,449.8 crore comprising ₹ 7,527.6 crore of free cash and ₹10,922.2 crore of restricted cash.
The airline's net debt stood at ₹23,551.6 crore on 30 June, up 27.8% from the year-ago period.
IndiGo plans to boost its liquidity by ₹5,000- ₹6,000 crore in the coming months, the airline's chief financial officer Aditya Pande told analysts during a post-result call.
Of this, the airline plans to raise at least ₹2,000 crore from the sale and lease back (SLB) of aircraft it currently owns, 12 ATRs and three A320ceo aircraft, respectively, Pande said adding that the remaining ₹3,000- ₹4,000 crore will be come from benefits accrued from supplementary rentals, renegotiated contracts with vendors, and other cost cutting measures. He, however, didn't elaborate on the time frame.
Pande added that the airline has reduced its daily cash-burn to ₹30 crore from ₹40 crore during the previous quarter.
However, the fall in domestic traffic since the fourth week of July remains a concern amidst rising covid-19 cases, travel restrictions imposed by states and a traditionally weak travel season, chief executive Dutta said adding that the airline's operations aren't being able to off-set its fixed costs.
"We expect the next nine to 10 months to be tough. But, the long -term view is very bullish," Dutta said.
Dutta, however, added that the government-mandated fare caps, which was recently extended till 24 November, should be discontinued as airlines can do a better job at managing their revenues.
"We would like to grow fast and get some of our capacity back," he added.