Billionaire Rahul Bhatia to helm IndiGo after surprise swing to profit

Fuelled by higher passenger revenues, the country’s largest airline IndiGo on Friday posted a profit after tax of 129.8 crore in the three months ended December 2021 amid the pandemic clouds.

InterGlobe Aviation, the parent of IndiGo, had slipped into a loss of 620.1 crore in the year-ago period.

In a significant development, the company has appointed its co-founder Rahul Bhatia as managing director with immediate effect and he would oversee all aspects of the airline.

Reflecting signs of slow recovery in the pandemic-hit airline industry, IndiGo’s revenue from operations jumped to 9,294.8 crore in the latest December quarter compared to 4,910 crore in the same period a year ago.

Total income surged 84.3 per cent on an annual basis to 9,480.1 crore in the third quarter of the current fiscal year.

“For the quarter, our passenger ticket revenues were 80,731 million, an increase of 98.4 per cent and ancillary revenues were 11,417 million, an increase of 41.3 per cent compared to the same period last year,” it said in a statement.

The higher revenues also offset the increase in expenses, including the more than doubling of fuel cost in the latest December quarter to 3,269.3 crore. In the year-ago period, the fuel cost stood at 1,142.9 crore.

Total expenses climbed 62.1 per cent to 9,346.4 crore in the three months ended December 2021.

“Fourth quarter fiscal year 2022 capacity in terms of ASKs is expected to reduce by around 10-15 per cent as compared to the third quarter fiscal year 2022,” the statement said.

ASK or Available Seat Kilometre indicates an airline’s capacity for carrying passengers.

“I am pleased that we were able to report a profit for the third quarter. It demonstrates that our business model is fundamentally strong. Our employees have remained a pillar of strength throughout this health crisis and have steadfastly provided superior service to our customers,” IndiGo CEO Ronojoy Dutta said.

IndiGo had a fleet of 283 aircraft, including 56 A320 CEOs, 140 A320 NEOs, 52 A321 NEOs and 35 ATRs at the end of December 2021. It operated a peak of 1,574 daily flights during the quarter, including non-scheduled flights.

“The capitalised operating lease liability was 307,645 million. The total debt (including the capitalised operating lease liability) was 351,534 million,” the statement said.

At the end of the December quarter, the company had a total cash of 17,318.9 crore, including free cash of 7,814.1 crore.

The board of directors, during its meeting on Friday, unanimously approved the appointment of Bhatia as Managing Director with immediate effect, subject to the approval of the shareholders.

Bhatia said his agenda would be transformational and would focus on expanding the airline’s presence in India and in international markets and building for the long term.

IndiGo Chairman Meleveetil Damodaran said the move will further strengthen the airline in the years ahead. Bhatia would oversee all aspects of the airline, and actively lead the management team, he added. 

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