Until last year, there was a lot of excitement for shares of InterGlobe Aviation Ltd, which runs IndiGo airlines. InterGlobe shares had touched a 52-week high of ₹1899 a piece in September on NSE, on the back of strong capacity growth. However, things are now moving in the opposite direction following the coronavirus outbreak, as capacity is expected to be trimmed.
The company did not give a clear guidance on capacity, but said it will return 120 A320ceos over the next two years, and replace them with A320neos, though the pace of replacement will depend on the trend in revenue.
The March quarter results show the impact of the lockdown put in place to battle the covid-19 pandemic, which began on 25 March. Available seat kilometre (ASK) for the quarter declined by 11% compared to the December quarter. On a per-unit basis, InterGlobe’s profit spread has been negative for the quarter. Cost per available seat kilometre exceeded revenues per available seat kilometre.
