India's Top Airline IndiGo Returns To Profit After Two Years Amid Strong Demand
IndiGo, India's biggest airline, expects its revenue to recover from April this year as demand for travel rebounds, its CEO Ronojoy Dutta has said, after the carrier reported its first quarterly profit in two years.
Signs Of Recovery
Airlines, the profits of which have been ravaged by the COVID-19 pandemic over the last two years, were seeing signs of recovery when the Omicron variant disrupted travel late last year.
Steep Fall In Bookings
Dutta said that the airline saw a steep fall in bookings after 15 December as India imposed curbs amid rising infections. And while travel is returning slowly due to pent up demand, he expects revenue to be lower in the January to March quarter before recovering.
"The Worst Has Come And Gone"
"The worst has come and gone, things are slowly getting better. At least we can say for sure they are not getting worse," Dutta told analysts over a call.
IndiGo parent Interglobe Aviation INGL.NS, which operates IndiGo, reported a net profit of 1.28 billion rupees ($17 million) in the three months to 31 December, compared with a loss of 6.27 billion rupees a year earlier.
Revenue From Operations
The company said that revenue from operations nearly doubled to 92.95 billion rupees from a year earlier, which Dutta said exceeded the levels seen prior to the COVID-19 pandemic.
Yields And Load Factor
Yields, a metric for profitability, grew 19.2% to 4.41 rupees compared with the previous quarter, despite a 186% rise in fuel prices over the same period. And passenger load factor, or the passenger carrying capacity being used, rose to 80% during the quarter.
Fourth Quarter Capacity Deployment Expectation
The airline expects to deploy 10%-15% lower capacity in the fourth quarter, compared with the previous one, as bookings gradually pick ramp up.
Stronger Yields On International Flights
Profits were also helped by stronger yields on international flights which were limited in number but saw strong traffic resulting in higher margins, said Dutta, who is hopeful that the government will soon ease restrictions on international travel.