India’s IndiGo posts record profit on soaring demand, go failure

BLOOMBERG

IndiGo, India’s biggest airline, posted record quarterly profit in the three months through June, as the demand for travel surged and a smaller competitor’s insolvency funneled a windfall of business.
The carrier reported net income of 30.87 billion rupees ($374 million) in the quarter, almost double analysts’ forecast of 17.6 billion rupees, it said in a stock exchange filing.
IndiGo’s market share in India has grown to about 63%, in part from hoovering up Go Airlines India Ltd’s customers after it stopped flying in May. It carried 23.4 million passengers in the three months through June, up 12% from the quarter before, according to the aviation regulator.
Revenue rose 30% to 166.83 billion rupees from a year earlier. Total costs stood at 140.7 billion rupees, while fuel costs declined 13%.
The carrier expects only a “single-digit” number of its engines to be affected by the latest issues flagged by RTX Corp’s  Pratt & Whitney unit. Some 1,200 engines will need to be removed and inspected over the next 12 months, to identify a “rare condition in powder metal” used in some parts made over a five year period beginning in 2015.
Pratt’s plan to inspect some 200 engines by mid-September, will only affect a handful of its aircraft, Chief Executive Officer Pieter Elbers said on an earnings call. The carrier is in touch with Pratt to find out the “precise duration and phasing of inspections” and assess the impact, Elbers said.
The latest manufacturing defects in Pratt engines won’t “dramatically” change IndiGo’s current situation, Elbers said.
The supply chain issues have idled around 40 aircraft, increasing from “high 30s” in the previous quarter, he said.
IndiGo is extending plane leases to ramp up capacity in the wake of the grounding of some aircraft, he added.