Winning Bizness Desk
Mumbai. IndiGo, India’s largest airline by market share, has reported a loss of ₹986.77 crore for the second quarter of FY 2024-25 (July-September 2024), a sharp contrast to the net profit of ₹188.9 crore recorded in the same period last year. This quarterly loss is attributed to rising operational costs despite an increase in overall revenue. IndiGo's consolidated revenue for July-September rose 13.55% year-on-year, reaching ₹16,969.6 crore, up from ₹14,943.9 crore in the same quarter of FY 2023-24. This growth reflects an increase in passenger numbers as domestic travel demand surged. Compared to the April-June quarter, where the company posted ₹19,571 crore in revenue, the current quarter witnessed a decline of 13.29%. The company also posted a significant net profit of ₹2,729 crore in the April-June quarter, underscoring the impact of Q2 challenges on its bottom line.
Key Factors Contributing to IndiGo’s Loss
Three main factors contributed to the airline’s loss in the second quarter:
1. Increased Airport Fees: Airport charges surged by 41%, adding to operational costs.
2. Higher Supplementary Rentals: There was a 29.6% increase in supplementary rentals for aircraft, contributing to the increased expenditure.
3. Rising Fuel and Maintenance Costs: Aircraft fuel prices saw a 12.8% increase, with fuel costs rising from ₹90,779.88 per 1,000 liters last year to ₹96,148.38 per 1,000 liters in the current quarter. This, combined with increased repair and maintenance expenses, put further pressure on the company’s finances.
Decline in Revenue Per Passenger
IndiGo’s revenue per passenger decreased from ₹5.24 in the April-June quarter to ₹4.55 in the July-September period, indicating challenges in maintaining profitability on a per-passenger basis. Despite this, the total number of passengers increased significantly, driven by domestic travel demand.
Passenger Traffic and Market Share
IndiGo served a total of 244.49 lakh passengers in the second quarter, marking an increase from 234.09 lakh passengers in the same period last year.
IndiGo holds a substantial market share in India, controlling 62.5% of the aviation market, which reinforces its position as the country’s leading airline.
Stock Performance Reflects Mixed Sentiment
- Ahead of its Q2 earnings report, IndiGo’s parent company, InterGlobe Aviation, saw its shares close at ₹4,373.70, down by 3.23% on October 25.
- Despite the recent dip, IndiGo shares have delivered strong returns over the past year. The stock is up 46.84% since January 1, marking a one-year increase of 80.07% and a six-month gain of 14.72%. This growth highlights investor confidence, despite quarterly losses, with the company’s market cap currently at ₹1.69 lakh crore.
IndiGo: India’s Leading Airline
Founded in 2006 by Rahul Bhatia and Rakesh Gangwal, IndiGo has grown to become India’s largest airline by market share. The airline operates over 2,000 flights daily, serving more than 110 destinations across the globe. Its network covers over 80 domestic and more than 30 international routes, supported by a fleet exceeding 320 aircraft and catering to over 500 million customers. IndiGo's second-quarter loss underlines the impact of rising costs on profitability, even as the airline enjoys strong market positioning and growing revenue. The airline’s resilience in the face of increased operational expenses and competitive pressure demonstrates its critical role in India's aviation market and continued appeal to investors.
