IndiGo reports third consecutive loss during September quarter1 min read . Updated: 30 Oct 2020, 06:00 AM IST
Airline expects fleet to be stagnant or even lower than current levels till 2022
NEW DELHI : InterGlobe Aviation Ltd, India’s largest domestic airline, reported a third straight quarterly loss as travel demand remained muted because of the covid-19 pandemic.
IndiGo said its loss widened to ₹1,195 crore in the quarter to September from ₹1,062 crore a year ago. Revenue fell by 64.5% to ₹3,029 crore. A Bloomberg survey of analysts expected the company to report a loss of ₹1,604.80 crore on a revenue of ₹2,635.90 crore.
The management told investors during a post-earnings conference call that the airline’s fleet size will either stay stagnant or decline from the current levels over the next two years as it returns its older leased Airbus A320ceo planes to lessors. IndiGo expects its fleet comprising 282 planes at the end of 30 September to expand only from 2023.
Indian airlines are hoping to ride out a prolonged drought in travel demand because of the pandemic by aggressively cutting costs and putting on hold fleet expansion plans.
IndiGo’s expenses dropped by 56% to ₹4,224 crore during the September quarter as it operated fewer flights due to capacity restrictions imposed by the government.
Domestic airlines are allowed to operate up to 60% of their pre-pandemic capacity. The capacity restrictions may be eased to 75% soon, according to civil aviation minister Hardeep Singh Puri.
“We are currently operating at about 58% of our total capacity though the government, at present, allows airlines to deploy up to 60% of capacity. This is due to flight restrictions in Kolkata, Mumbai and Chennai," IndiGo’s chief executive Rono Dutta told investors.
“We expect to operate at about 80% capacity by the end of the year (calendar year) and at about 100% by April-May 2021. This would, however, depend on the government removing capacity restrictions," Dutta said, adding that the airline’s focus will be on aggressively expanding its domestic capacity.
Dutta expects the government to lift curbs on international flights in a phased manner from November.
“During September 2020, we were operating 20% of international flights that we operated during September 2019," he said, adding that overseas flights operated by IndiGo were mostly charter flights, repatriation flights, and flights under the air bubble agreements with various countries as scheduled international flight operations remain grounded until 30 November.