Q1 report card: IndiGo revenue soars 328% to Rs 12,855 crore; loss narrows

High fuel prices, weak rupee keep bottom line under pressure

India’s largest airline IndiGo clocked record revenue in the quarter ended June, but yet ended up making a loss on the back of high fuel prices and a weak rupee.

While the airline’s revenue from operations surged 328 per cent to Rs 12,855.3 crore from Rs 3,007 crore in the year-ago period, it reported a loss of Rs 1,064.3 crore. However, the Q1FY23 loss was 66.5 per cent less than the loss incurred by the airline in the corresponding period a year ago, IndiGo said in a statement.

Fuel prices for Indian airlines almost doubled in June 2022 as compared to a year ago.

Brokerages had expected losses for the sector to narrow sequentially despite nearly 40 per cent quarter-on-quarter (QoQ) rise in aviation turbine fuel (ATF) prices, because of an increase in operation scale and yield improvement.

April-June of 2021 was severely impacted by the second wave of Covid-19, which had forced Indian airlines to cut operations significantly.

IndiGo CEO Ronojoy Dutta, who attended his last post-results call, said that the airline is consistently clocking high revenue, and if fuel cost stays in control, the airline will be back to being profitable from next quarter.

The airline, he said, is planning to deploy 70-80 per cent more capacity in the ongoing quarter as compared to the similar period last year. 

“Airlines will find it difficult to match the prices and value proposition offered by IndiGo as our operational efficiencies are very high. We want to provide a service where a customer thinks 'why should I make a mistake of not booking IndiGo?,” Dutta said.

Dutta said that increased competition in the Indian skies will not impact IndiGo’s growth as the capacity deployment by rivals and new airlines is yet to be significant.

Tata-led Air India is likely to focus more on international long-haul travel while IndiGo would like to connect shorter international destinations with its narrow-body fleet of Airbus A320,A321 and A321 XLR, which is likely to be added to the fleet in 2025.

“Competition is increasing but capacity deployment by others is low. One of our major competitors (SpiceJet) has reduced capacity a lot in the recent past and that is helping us a lot. So far, no irrational behaviour by airlines in India in terms of fares,” Dutta said.

On the international front, the airline has reached pre-Covid levels in terms of the number of international flights operated despite not having started operations to China, Myanmar and Hong Kong yet. “Whenever the situation is conducive, we would like to start flying to those destinations,” he said.