Indigo faces air pockets

Indigo is having a bad run on the bourses today morning. The stock is in the red, going down almost 5.5% to Rs.773 but it has recovered sharply from there to Rs.815 levels now. So its not a big thumbs down after all to the poor Q2FY19 numbers.

The rising cost of fuel, rupee depreciation and lower yields pushed Indigo into a quarterly loss of Rs.652 crore for Q2FY19. A loss was expected by most analysts but no one has estimated it to be so high. The loss would have been much higher but for the tax credit of Rs.336 crore which it booked during the quarter. Topline was up 17% (YoY) at Rs.6185 crore.

Despite the fuel price hike, the company could not hike the ticket prices as the India aviation sector is intensely competitive and any price hike would have meant loss of market share. Its yield or average earnings per passenger per kilometer fell 10% to Rs.3.21.

Its aircraft fuel expense for the quarter was at Rs.3035 crore, up 84% (YoY)- fuel price in previous Q2 was at Rs.50 and in this Q2, it is at Rs.70. Forex loss was at Rs.335 crore, up from Rs.46 crore (YoY) – US$ to INR in current Q2 was at Rs.72.58 v/s 65.28 (YoY).

Its total cost stands at Rs.13,164 crore while debt was at Rs.2641 crore. IndiGo added 20 planes in Q2FY19, taking the total count of aircraft in its fleet to 189.