Company That Runs IndiGo Records Quarterly Loss
Interglobe Aviation Ltd, which runs India's biggest airline, IndiGo, has recorded its fifth straight quarterly loss, as the COVID-19 pandemic kept air travel well below normal levels.
The company recorded a net loss of 11.47 billion Indian rupees ($157.43 million) for the three month period that ended on March 31, compared with a loss of 8.71 billion rupees a year earlier.
"This has been a very difficult year with our revenues slumping hard due to COVID, showing some signs of recovery during the period December to February and then slumping again with the second wave of the COVID," IndiGo CEO Ronojoy Dutta said in a statement.
A Period Of Great Trial
The coronavirus pandemic is a period of great trial for IndiGo shareholders and staff, Dutta said, adding that the carrier is strengthening its core to emerge stronger when the sector recovers from the current situation.
India's aviation sector is reeling under losses with air travel brought to a halt for several weeks last year. The country's airlines are expected to lose a total of $4 billion this fiscal year, aviation consultancy CAPA estimated - similar to their losses last fiscal year through to March 31.
Just as air travel in India was beginning to recover earlier this year, a second more deadly wave of the pandemic hit the nation, killing hundreds of thousands of people.
Most Indian states were under lockdown in April and May, and the government has restricted airlines to fly only 50% of their total capacity.
Travel Recovery Expectations
Dutta said that IndiGo expects domestic air travel to recover by its October-December quarter, and has started to see a pick-up in passenger numbers despite a resurgence in COVID-19 infections in the country.
Air travel in India had started to recover from the impact of the pandemic in early 2021. February was the best-performing month for IndiGo since the pandemic hit, with passenger numbers rising to as high as 180,000 a day.
But since March a second, more deadly waves of infections has hit airlines and forced them to raise funds and cut costs.
In a "best case scenario", IndiGo expects to return to the February 2021 levels by the third quarter (October-December) of the current fiscal year, Dutta said on an analyst call.
Dutta also expects that any meaningful recovery in international travel will now be pushed to the fiscal fourth quarter - January to March 2022.
Money Raise Plans
Interglobe Aviation Ltd has plans to raise up to 30 billion rupees ($412 million) to strengthen its balance sheet.
It also plans to raise an additional $618 million of liquidity during the year through credit from banks and sale and leaseback of aircraft, CFO Jiten Chopra told analysts.
The company's cash burn increased to $2.6 million a day in the March quarter from approximately $2 million a day in the December quarter. It expects this to rise further in the June quarter, Chopra said, without giving details. The group's fiscal year runs from April to March.
Dutta said that while the carrier expects revenues to be impacted in April and May due to travel disruptions amid lockdowns, the airline has started to see a steady pick up in passenger numbers and expects an improving revenue trend for the rest of the year.
"We are hopeful that with the reducing trend in COVID cases and increased pace of vaccinations, passenger confidence and airline traffic will gain further momentum," he said.