Thursday, October 6, 2022

India’s biggest airline reports $150 million loss as costs surge

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BENGALURU: India’s biggest airline IndiGo reported a bigger loss in the September quarter, hurt by higher expenses and as the aviation industry grapples with slowing passenger growth in a sluggish economy.

The airline’s owner InterGlobe Aviation’s net loss in the three months to Sept. 30 widened to 10.66 billion rupees ($150.1 million) from 6.52 billion rupees in the same period last year.

Expenses rose 27.6% to 95.77 billion rupees. Depreciation and amortisation costs grew more than fivefold to 10.29 billion rupees, while costs related to aircraft repair and maintenance nearly doubled to 15.3 billion rupees.

Aircraft fuel costs, meanwhile, rose a modest 2.6%, much lower than the 84% jump a year earlier.

The results come against the backdrop of an escalating tussle between IndiGo co-founders Rakesh Gangwal and Rahul Bhatia over corporate governance issues, which some analysts say could hinder high-level decision making at the airline.

The quarterly loss also comes as Asia’s third-largest economy grows at its slowest pace in years and domestic passenger growth cools.

Passenger traffic in India rose only 1.2% year-over-year in September, the slowest increase since March and the second worst pace in five years.

Still, IndiGo’s quarterly revenue from operations surged 31% to 81.05 billion rupees as the Gurugram-based carrier flew more customers and introduced new destinations.

IndiGo and smaller rival SpiceJet have benefited so far this year from the collapse of cash-strapped Jet Airways, once India’s largest private carrier, as both raced to fill Jet’s vacated slots.

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