India's IndiGo narrows quarterly loss on pricing actions
IndiGo parent InterGlobe Aviation on Thursday posted a smaller second-quarter loss as India’s top airline undertook pricing actions to offset rising fuel costs. The company reported a loss of 20.55 billion rupees ($215.73 million) in the quarter ended September 30, CEO Willie Walsh’s first after he took over as the company’s head in August this year, from a loss of 26.14 billion rupees in the…
InterGlobe Aviation, the parent company of India's leading airline IndiGo, reported a smaller second-quarter loss in its finances. CEO Willie Walsh assumed his role in August, presenting his first quarterly report since taking charge. The company's loss narrowed from 26.14 billion rupees in the same period last year to 20.55 billion rupees in the quarter ending September 30.
Indian airlines have been focusing on cost reductions and strategic pricing to counter the effects of soaring fuel costs during a seasonally weaker travel period. Travel demand usually declines during this quarter, occurring after the peak summer season and preceding the festive travel rush. While revenue increased by approximately 26% to 233.64 billion rupees, expenses rose by 19.2% to 263.57 billion rupees.
Fuel expenses accounted for about 37.8% of the total costs. In October, IndiGo announced a hike in fuel charges for both domestic and international routes, similar to the increase seen in April. This move is anticipated to alleviate some pressure on the airline's profit margins. Additionally, the airline has expressed intent to explore fuel price hedging given the significant rise in jet fuel costs.
However, as of now, no formal hedging program has been announced. The impending Dubai restrictions on foreign flights until May 31 are expected to disproportionately affect Indian airlines.
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