Blitz Business Research
New Delhi , January 25: InterGlobe Aviation, the operator of IndiGo Airlines, has reported an 18.6% decline in net profit for the third quarter ending December 31, 2024. The airline’s net profit fell to ₹2,448.8 crore, down from ₹2,998.1 crore in the same quarter last year. The dip in profitability was largely driven by significant foreign exchange losses due to the depreciation of the Indian rupee.
The rupee’s 2% decline against the U.S. dollar during the quarter led to a substantial increase in forex losses, contributing to a 20% rise in overall expenses. Additionally, inflation and rising operational costs further impacted the airline’s bottom line. IndiGo’s cost per available seat kilometer (CASK), excluding fuel, surged by 23.1% year-on-year to ₹3.25. Depreciation and amortization costs also increased by 33.6%.
Despite these challenges, IndiGo reported a robust 13.7% growth in revenue from operations, which rose to ₹22,110.7 crore compared to ₹19,452.1 crore in the same period last year. This growth was fueled by a 12% increase in available seat kilometers (ASK) and a 13.5% rise in revenue passenger kilometers (RPK). Passenger load factor also improved by 1.2 percentage points, reaching 86.9%, indicating better seat occupancy.
IndiGo carried 27.325 million passengers during the quarter, up from 24.31 million passengers in the corresponding period last year, further strengthening its market share to 63.8%, compared to 62.1% previously.
Earnings before interest, tax, depreciation, amortization, and rent (EBITDAR) grew by 10.7% to ₹6,059 crore, with an EBITDAR margin of 27.4%, a slight decline from 28.1% in the same quarter last year. However, when adjusted for forex impacts, the EBITDAR margin improved to 33.7%.
The airline’s financial position remains strong, with total cash reserves increasing by 35% year-on-year to ₹43,781 crore as of December 31, 2024. Free cash reserves saw a significant jump of 50.5% to ₹28,904 crore. However, debt levels also rose by 27.3%, reaching ₹65,139 crore, primarily due to capitalized operating lease liabilities.
IndiGo continues to maintain its leadership position in the domestic aviation market, backed by its operational scale and consistent revenue growth. The company’s resilience in the face of forex headwinds and inflationary pressures underscores its ability to adapt to a challenging macroeconomic environment.
While currency depreciation and rising operational expenses have posed hurdles, the airline’s strong market position and growing revenue provide a promising outlook as it navigates through these challenges.