IndiGo Q2 net loss narrows to Rs 1,195 crore QoQ, revenue jumps 257%

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InterGlobe Aviation-run IndiGo airline on Thursday reported a standalone net loss of Rs 1,194.8 crore for July-September quarter of FY21 (Q2FY21) as revenue picked up. The airline had reported a record loss of Rs 2,840 crore during the June quarter of FY21 amid suspension of air travel owing to Covid-19 pandemic. In the year-ago quarter, the loss stood at Rs 1,060 crore.

“We are pleased that we are slowly but surely stair-stepping our way back to normal capacity. While we are very much focused on managing the crisis of the present, we are also reimagining the promise of the future. Once we are back at I 00 percent capacity, we will have lower unit costs, a stronger product, a more efficient fleet and a robust network. We are impatient for the arrival of the future,” Ronojoy Dutta, CEO, said in a statement.Loss before tax (PBT) widened 16 per cent YoY to Rs 1,194.9 crore from Rs 1,031.8 crore incurred in Q2FY20.

The low cost carrier’s revenue jumped 257 per cent sequentially to Rs 2,704.9 crore from Rs 766.7 crore reported in Q1FY21. On a yearly basis though, revenue plunged 66.2 per cent YoY as passenger load remained weak on a yearly basis.

The metric was slightly higher than Street estimate as passengers preferred to travel via airways amid growing health concerns owing to Covid-19.

Analysts at Kotak Institutional Equities, for instance, had estimated the revenue to come in at Rs 2,511 crore. 

The airline’s load factor (PLF) for the quarter stood at 65.1 per cent, down 18.5 percentage points from 83.5 per cent in Q2FY20.

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Passenger yield, or average fare per passenger mile, jumped 9 per cent YoY to Rs 3.83 courtesy increased domestic capacity, which hit 60 per cent in September from 30 per cent at the end of Q1FY21, and due to minimum airfares cap. The airline operated at a peak of 823 daily flights during the quarter including charter flights.

“Total income for the quarter ended September 2020 was Rs 3,029.2 crore, a decrease of 64.5 per cent over the same period last year. For the quarter, our passenger ticket revenues were Rs 2,208.2 crore, a decrease of 68.9 per cent and ancillary revenues were Rs 506.6 crore, a reduction of 45.5 per cent compared to the same period last year,” the airline said.

Operational performance

The airline reported an EBITDAR (earnings before interest, tax, depreciation, amortisation, and rent) at Rs 408.5 crore for the quarter under review, up 59.3 per cent on a yearly basis from Rs 256.4 crore. On a quarterly basis, the airline had an EBITDAR loss of Rs 1,430 crore in Q1FY21.

Average seat kilometres (ASKM) – a metric to gauge passenger capacity utilisation – slipped 63.3 per cent YoY. The company’s expects Q3FY21’s capacity, in ASKs terms, to be around 60 per cent of Q3FY20 capacity.

Revenue per available seat kilometre (RASK) – or revenue earned on every additional seat flow – slipped 5.4 per cent YoY to Rs 3.24. The parameter is used to compare the efficiency of various airlines.

Total expenses for the quarter ended September 2020 were Rs 4,224.1 crore, a decrease of 55.9 per cent over the same quarter last year, the airline said.

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Costs and cash balance

With brent crude sliding nearly 30 per cent during the quarter under review, fuel costs slipped 79.3 per cent from the previous year quarter to Rs 646.4 crore. Other costs decreased 45 per cent YoY from Rs 6,456.2 crore to Rs 3,577 crore.

At the end of the quarter, the Gurugram-based airline was sitting on the cash balance of Rs 17,931 crore, comprising Rs 6,973.4 crore of free cash and Rs 10,958.4 million of restricted cash. Debt in the balance sheet, meanwhile, stood at Rs 25,419 crore. As of September 30, the airline had a fleet of 282 aircraft including 117 A320 CEOs, 116 A320 NEOs, 24 A321 NEOs and 25 ATRs — a net increase of 8 aircraft during the quarter. On Thursday, the airline’s stock settled 3.1 per cent higher on the BSE, as against 0.43 per cent decline in the S&P BSE Sensex. During the three month period under review, the stock of the low-cost carrier soared 26 per cent on the BSE, as against a 9 per cent rally in the benchmark S&P BSE Sensex, ACE Equity data show.