Interglobe Aviation, the operator of India’s largest airline IndiGo, reported its first quarterly loss in two years, driven mainly by rising fuel expenses and rising aircraft leasing costs. The airline revealed a loss of Rs 989 million for the three months ending September 30, a stark contrast to a profit of Rs 188 million during the same period last year.
IndiGo, which controls a 62.5 per cent market share in India’s aviation sector, is also recognized as Asia’s largest airline by market valuation. The financial difficulties have been exacerbated by ongoing problems with Pratt & Whitney engines, which grounded more than 70 IndiGo planes last November. As a result, the airline has had to extend leases on older aircraft while also leasing newer models.
The airline reported that overhead increased 22 percent, significantly outpacing a 13.6 percent increase in revenue. Fuel costs increased approximately 13 percent, while ancillary aircraft rental and maintenance expenses increased nearly 30 percent. In particular, costs associated with leasing newer aircraft and engines soared nearly fourfold.
In terms of capacity, IndiGo’s available seat kilometers (ASKs), a key measure of passenger carrying capacity, grew 8.2 per cent, aligning with the company’s forecast of high single-digit growth . With a fleet of 410 aircraft, IndiGo anticipates a double-digit percentage increase in capacity for the third quarter compared to a year ago.
Looking ahead, IndiGo is preparing to abandon its all-economy cabin model with the introduction of its first business class on select domestic routes, scheduled to launch next month.
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