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New Delhi / Bloomberg
IndiGo, India’s largest airline, posted fourth-quarter profit exceeding analysts’ estimates as a slump in crude oil cut fuel costs, helping the carrier offer cheaper fares and garner a bigger share of the world’s fastest-growing air travel market.
Net income in the three months through March was almost unchanged at 5.79 billion rupees ($87.3 million) compared with 5.77 billion rupees a year earlier, InterGlobe Aviation Ltd., which operates IndiGo, said in a statement. Analysts on average expected 5.27 billion rupees, according to data compiled by Bloomberg. The company plans a final dividend of 15 rupees a share.
InterGlobe raised about $451 million from an initial public offering in November. IndiGo’s market share in India, where carriers are struggling with fares below cost and high provincial taxes, widened to 38.4 percent of passenger traffic in March from 35.6 percent in December. A 50 percent rally in IndiGo’s shares since its February low has boosted its market value to $5.8 billion, taking it past $5.71 billion at China’s Spring Airlines Co. as Asia’s top budget carrier.
Many carriers in the region are reaping the rewards of lower expenses after oil prices reached 13-year lows earlier in 2016. Indian carriers have limited hedging on fuel purchases, making them more flexible than Asian peers to respond to a drop in oil prices.
IndiGo’s fuel costs for the quarter fell 15 percent to 10.2 billion rupees, while the number of passengers jumped 24 percent to 8.93 million. The company said it expects to complete the year through March 2017 with a fleet of 136 aircraft, versus 107 planes as of last month.