IndiGo reports first quarterly loss in two years amid rising costs

Interglobe Aviation, the operator of India’s largest airline IndiGo, has reported its first quarterly loss in two years, primarily driven by soaring fuel expenses and increasing aircraft rental costs. The airline disclosed a loss of Rs 989 crore for the three months ending September 30, a stark contrast to a profit of Rs 188 crore during the same period last year.

IndiGo, which commands a 62.5 per cent market share in the Indian aviation sector, is also recognized as Asia's largest carrier by market valuation. The financial difficulties have been exacerbated by ongoing issues with Pratt & Whitney engines, which grounded over 70 IndiGo aircraft last November. As a result, the airline has had to extend leases on older jets while simultaneously leasing newer models.

The airline reported that overall expenses surged by 22 per cent, significantly outpacing a 13.6 per cent increase in revenue. Fuel costs climbed approximately 13 per cent, while supplementary aircraft rental and maintenance expenses rose nearly 30 per cent. Notably, costs associated with newer aircraft and engine rentals skyrocketed nearly four-fold.

In terms of capacity, IndiGo's available seat kilometers (ASK), a key measure of passenger-carrying capacity, grew by 8.2 per cent, aligning with the company’s forecast of high single-digit growth. With a fleet of 410 aircraft, IndiGo anticipates a low-double-digit percentage increase in capacity for the third quarter compared to the previous year.

Looking ahead, IndiGo is preparing to depart from its all-economy cabin model with the introduction of its first-ever business class on select domestic routes, set to launch next month.