Indigo has reported a net profit of 1.9 billion rupees (US$22.8million) for the quarter ended September 2023. Speaking on an earnings call, chief executive of Indigo, Pieter Elbers, said that with these latest set of results, the airline had completed a full cycle and remained consistently profitable for the last four quarters. “This is the first time post financial year 2018 and after five years that we have again, achieved profitability in the seasonally weak second quarter,” he said.
Excluding the impact of a foreign exchange loss, Indigo reported an operational profit of 8.1 billion rupees (US$131.5 million).
Indigo carried 26.3 million customers during the quarter – an increase of 33% over the same period last year. The average load factor was around 83%, reported the airline.
During the quarter, Indigo has worked to strengthen its network, adding six new destinations across Central Asia, Southeast Asia and Africa, while also resuming operations to Hong Kong. Elbers noted that the airline will continue to increase its international network and now flies directly to 34 international destinations.
In September, Indigo also signed a codeshare agreement with British Airways to further boost connectivity between India and the UK, and will also be expanding its codeshare agreement with Qantas from the current unilateral one-way to bilateral two-way codeshare, pending necessary approvals.
Commenting on the disruption caused by the grounding of some aircraft due to the manufacturing issues with the Pratt & Whitney GTF engines, chief financial officer Gaurav Negi, confirmed that further incremental engine removals will impact the Indigo fleet going forward into 2024. “Our current estimates indicate that, these accelerated removals and incremental shop visits will further adversely impact our operating fleet from Q4 onwards, which is post January 1st 2024, and would lead to higher number of groundings,” said Negi. “We are in constant touch with the OEM to navigate through these challenges.”
Negi adds that the airline has been preparing for this event for many months and has already moved to deliver on its planned capacity by a series of actions including: retaining 14 CEOs in the fleet, extending and re-inducting 36 aircraft; executed damp leases of two widebodies flying on the Istanbul route and damp leases of 11 additional aircraft which will be starting operations this month. Additionally the airline is also executing leases for 12 additional CEOs from secondary market with deliveries expected from January 2024 onwards.
Negi added that the airline will “keep on exploring additional capacity from the secondary market” and that with these actions the airline remains confident that it can meet its long-term capacity guidance. Indigo currently expects to add 25% capacity addition in the third quarter on a year-over-year basis.
Indigo has taken deliveries of 18 aircraft during the quarter and closed the quarter with a total fleet of 334 aircraft. Negi stated that given its large order book of around 980 aircraft, one of his current endeavours is to diversify the airline’s source of financing. For this purpose, he said that the airline is in the process of setting up aircraft leasing unit in the GIFT City in Gujarat that will, he says, “enhance our access to capital from lessors across the world”. Indigo is also exploring different forms of leases and has leased two aircraft on finance lease in this quarter. “Given our healthy free cash, we are also considering purchase of certain aircraft and related assets in the coming quarters,” added Negi.