IndiGo Expecting Slump in Ticket Prices and Revenue this Quarter

The airline is currently undergoing a crisis, where its co-founders are engaged in a public spat

Highlights
  • IndiGo does not anticipate making more benefits from the grounding of Jet Airways
  • The unresolved spat between the co-founders will soon affect IndiGo’s stock price

The airfare and revenues will drop in July-September season, revealed IndiGo in an analyst call to press after the release of the quarter result. The airline also added that it does not anticipate making any more benefits from the grounding of Jet Airways.

IndiGo has declared a profit of Rs 1,203 crores in the quarter ended in June. The airline has registered a 42 fold increase in its net profit, from Rs 27 crore profit made in the corresponding quarter last year. The airline attributed the increase in cargo performance and passenger revenue for growth. Thanks to the grounding of Jet Airways, the airline had opportunities in terms of slots and high airfare.

“Cessation of services of Jet Airways positively impacted our profits this quarter helping our unit revenues to grow by 2-3% to the best of our estimates,” said Ronojoy Dutta, chief executive officer in a post-results conference call.

IndiGo’s revenue rose over 44% to Rs 9,420.1 crore in Q1, compared to Rs 6,512 crore it made in the corresponding period of the last quarter. IndiGo also reported EBITDAR at Rs 2,779 crore in this quarter, compared to Rs 1,130 crore in FY19.

For the quarter, passenger ticket revenue was Rs 8,445.10 crore, an increase of 46.4% and ancillary revenue was Rs 902.60 crore, a rise of 32.2% compared with the same period last year.

“We do not expect any meaningful impact of Jet Airways to continue as all airlines have now replaced the capacity vacated by Jet,” Dutta added.

The airline is currently undergoing a crisis, where its co-founders are engaged in a public spat. The unresolved spat will soon affect its stock price. According to IndiGo’s management, the dispute is over the shareholder agreement, and the company’s business strategies, including the international expansions, remain intact. In its statements, IndiGo’s CEO has said that the matter going on in the company will not affect how the airline is going to be run. However, the analysts have said that a little disruption in the growth rate can be expected.

Ria is a lead news writer at Aviation Scoop. She writes from dawn to dusk, reads in the evenings, and draws at some ungodly hours. She loathes human interaction, and finds solace in the sweet, musky smell of old books, and rain. Find her on Twitter here - @rialakshman.

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