India’s Top Airline Posts Biggest-Ever Quarterly Loss

(Bloomberg) -- InterGlobe Aviation Ltd. reported a wider-than-expected quarterly loss Thursday, amid fierce competition in India, illustrating how even the country’s biggest airline isn’t immune to challenges in one of the world’s fastest-growing aviation markets.

• Loss at the operator of IndiGo widened to 10.7 billion rupees ($150 million) for the three months ended Sept. 30, compared with a loss of 6.5 billion rupees a year earlier. Analysts on average expected the airline to post a net loss of 767 million rupees, according to data compiled by Bloomberg.

Key Insights:

• The loss was driven by foreign-exchange losses and a re-assessment of future maintenance costs, Chief Executive Officer Ronojoy Dutta said in a statement. The loss is its biggest ever as a publicly-listed company.
• IndiGo expects capacity to increase 25% in the year ending March 30; sees Q3 capacity rising 22%.
• IndiGo, the world’s top customer for Airbus SE’s best-selling A320neo jets, hasn’t gained market share since Jet Airways India Ltd. was forced to cancel all flights in April, as smaller rivals SpiceJet Ltd. and Vistara lapped up the defunct airline’s Boeing Co. jets.
• The billionaire owners of IndiGo, Rahul Bhatia and Rakesh Gangwal, are embroiled in a public spat over corporate governance, clouding the company’s outlook. Shares of the airline, Asia’s biggest carrier by market value, have largely shrugged that off, rising more than 40% this year.
• Air-traffic growth in India has been muted as a slowing economy prompts consumers to cut back on discretionary spending. Indian airlines carried only 3% more passengers in the first nine months of the year than in the same period in 2018, compared with more than 20% growth in recent years. Indian regulators don’t expect the market to return to double-digit growth until next year.

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• Fuel costs, typically the biggest expense for airlines, rose 2.6% to 31.2 billion rupees.
• IndiGo had a total cash balance of 187.4 billion rupees as of Sept. 30 and total debt of 198.4 billion rupees.
• Yields — a measure of fares — rose 9.4% to 3.52 rupees, IndiGo said, showing local airlines are starting to raise fares after rival Jet Airways stopped flying.
• Billionaire Owners’ Public Spat Weighs on IndiGo’s Future
• GE-Safran JV Wins $20 Billion Engine Deal From Top A320neo Buyer

To contact the reporter on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, Will Davies, Abhay Singh

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