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Q2 Results: IndiGo Reports Biggest Ever Quarterly Loss

Net loss of the operator of India’s largest airline widened to Rs 1,062 crore from Rs 652 crore loss a year ago.

An Airbus SAS A320 aircraft operated by IndiGo taxies at Chhatrapati Shivaji International Airport in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)
An Airbus SAS A320 aircraft operated by IndiGo taxies at Chhatrapati Shivaji International Airport in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

InterGlobe Aviation Ltd. reported its biggest quarterly loss since listing as the value of operating leases fell due to rupee depreciation and maintenance costs rose.

Net loss of the operator of India’s largest airline widened to Rs 1,062 crore from Rs 652 crore a year ago, according to its exchange filing. Analyst estimates compiled by BloombergQuint had pegged the loss at Rs 42 crore.

Its revenue, however, rose 31 percent over the last year to Rs 8,105.2 crore, as IndiGo flew more passengers.

The carrier’s operational performance missed estimates despite a rise in yields, fall in oil prices and strong domestic passenger growth. Yields—a measure of average fare per passenger per kilometre—rose to Rs 3.52 per kilometer from Rs 3.21 a year ago.

The company’s earnings before interest, taxes, depreciation, amortisation and rentals, stood at Rs 97 crore against an operational loss of Rs 116 crore a year ago. That compares with the Rs 1,397-crore Ebitdar forecast. Operating margin stood at 1.19 percent compared with -1.87 percent.

IndiGo also reported mark-to-market losses worth Rs 428.2 crore as the Indian rupee depreciated to 70.33 against the dollar from 69.56 in the preceding three months. But that’s in line with the company’s expectation. It also recognised an additional expense of Rs 319 crore for maintenance.

“While our revenue performance was much better during the quarter, the losses were accentuated by forex losses on operating lease liabilities created under Ind-AS 116, and re-assessment of accrual estimates for future maintenance cost,” Chief Executive Ronojoy Dutta said in a media statement.

Cut In Capacity Growth Guidance

IndiGo has also lowered its guidance for capacity—the seats available per kilometer. The airline now expects capacity for FY20 to grow at 25 percent from 30 percent earlier. During the second quarter, capacity increased 24 percent while the company had guided for 28 percent.

Shares of InterGlobe Aviation closed 0.85 percent higher ahead of the results, compared with a flat Sensex.