IndiGo, India\u2019s biggest airline, fell to the lowest in 16 months as rising fuel prices and a weaker rupee led to its worst-ever quarterly profit in a fiercely-competitive market.<\/p>\n
The carrier, operated by InterGlobe Aviation, said profit dropped 97% to $4mn in the three months through June, its worst quarterly result since listing in 2015. That compared with the average analyst estimate of Rs 5.10 billion. The stock slid 9.3% as of 10:30AM in Mumbai, the worst performing stock in the 26-member Bloomberg World Airline Index.<\/p>\n
\u201cThe current revenue environment continues to remain weak particularly in the 0-15 day booking window,\u201d co-founder and interim Chief Executive Officer Rahul Bhatia told analysts on a conference call Monday. \u201cWe do not believe that these fare levels are sustainable, especially given the increase in input costs.\u201d<\/p>\n
Taxes on jet fuel in India make it the most expensive in Asia and rising crude prices have only added to that pressure. On top of that, a weakening rupee has added to expenses for airlines, which are still forced to sell tickets below-cost to attract an emerging middle-class flying for the first time.<\/p>\n
IndiGo, Asia\u2019s biggest budget airline by market capitalization, slumped as much as 11.4% earlier, the lowest intraday level since March 16, 2017. Smaller rivals SpiceJet and Jet Airways India also fell in Mumbai trading.<\/p>\n
\u201cIt is clear that the stock\u2019s performance will depend critically on a reversal in the price trend,\u201d SBICap Securities said in a research note. \u201cThere is nothing on the horizon to indicate that is likely anytime soon.\u201d<\/p>\n
Bhatia said engine manufacturer Pratt & Whitney should be able to provide enough spare turbines to get its grounded Airbus SE A320neo jets flying this quarter, a problem which forced the airline to lease older planes that needed more regular shop visits. Pratt is a part of United Technologies Corp.<\/p>\n
\u201cWe remain cautiously optimistic and hope that these issues are resolved at the earliest,\u201d Bhatia said on the conference call, while adding that he is \u201cnot happy about the situation.\u201d Things should improve \u201cin the current quarter\u201d as new turbines arrive, he said. <\/p>\n
Durability issues with Pratt engines have been a headache since IndiGo took delivery of its first A320neo in 2016, causing delays and groundings that have forced the carrier to lease older, less-efficient jets. That\u2019s hurt margins already under pressure from fuel costs and the local fare war.<\/p>\n
IndiGo, the biggest customer for the A320neo with 430 on order, said last week that \u201ca few\u201d new aircraft are still grounded and won\u2019t fly until Pratt sends spare engines. The carrier, operated by InterGlobe Aviation Ltd., had 36 neos out of a fleet of 169 aircraft at the end of the quarter.<\/p>\n","protected":false},"excerpt":{"rendered":"
IndiGo, India\u2019s biggest airline, fell to the lowest in 16 months as rising fuel prices and a weaker rupee led to its worst-ever quarterly profit in a fiercely-competitive market. The carrier, operated by InterGlobe Aviation, said profit dropped 97% to $4mn in the three months through June, its worst quarterly result since listing in 2015. That compared with the average analyst estimate of Rs 5.10 billion. The stock slid 9.3% as of 10:30AM in Mumbai, the worst performing stock in the 26-member Bloomberg World Airline Index. \u201cThe current revenue environment continues to remain weak particularly in the 0-15 day booking […]<\/p>\n","protected":false},"author":40,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[229],"tags":[],"class_list":["post-173578","post","type-post","status-publish","format-standard","hentry","category-civil-aviation"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/173578","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=173578"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/173578\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=173578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=173578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=173578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}