IndiGo reported fourth-quarter profit that missed analysts’ estimates, as rising fuel costs offset the post-Covid travel rebound at India’s largest airline.
Net income at parent company InterGlobe Aviation Ltd was 9.16 billion rupees ($111 million) in the period ended in March, short of the 16.2 billion rupees expected by analysts.
Revenue from operations surged 77% to 141.6 billion rupees from a year earlier.
Grounded planes also slowed IndiGo’s expansion. The company is working with Pratt & Whitney to address the shortage of spare engines and supply-chain disruptions that have idled more than 35 jets, Chief Executive Officer Pieter Elbers said on earnings call. It is planning to extend aircraft leases and wet lease jets to compensate for the lost capacity, he said.
The airline plans to hire 5,000 workers and add as many as 50 aircraft in fiscal 2024, Chief Financial Officer Gaurav Negi said. IndiGo will double in “size and scale” by the end of decade. The airline is looking to expand in Central Asia and start flights to Nairobi and Jakarta, the CFO said.
Indian airlines as a whole carried 37.5 million passengers, up 52% from a year earlier, according to data from the aviation regulator. With a market share of about 57%, IndiGo is well positioned to exploit that growth. The airline flies to 78 domestic destinations and 26 international. Robust demand and solid execution drove IndiGo to record fourth-quarter profit, its second profitable quarter in a row, Elbers said in a statement.
The fourth-quarter result trimmed IndiGo’s annual loss to 3.17 billion rupees. IndiGo’s local dominance is likely to strengthen with rivals Go Airlines India filing for insolvency protection and being ordered not to fly, and SpiceJet also struggling.