indigo suffers quarter loss

0

MUMBAI, 26 October 2018: Leading Indian airline IndiGo reported its first quarterly loss as a listed company Wednesday as rising oil costs and a weak rupee erode the profitability of India’s carriers.

IndiGo, India’s largest airline by market share, posted a loss of 6.52 billion rupees (USD89.07 million) for the three months ending September, it said in a filing to the Bombay Stock Exchange.

That compared with a profit of 5.52 billion rupees for the same period last year and comes after it recorded a 97% fall in net profits in June.

“Higher fuel prices responsible for more than half of the profitability decline, remainder due to currency depreciation,” the company said in the statement.

The figures represent IndiGo’s first quarterly loss since it listed on stock exchanges near the end of 2015.

Indian airlines are facing greater costs due to high fuel prices and a plummeting currency.

The Indian rupee is hovering around 73 against the dollar after starting the year at 63.67 while global brent crude was around USD76 a barrel on Wednesday.

IndiGo said its total expenses rose 58.2% to 75.02 billion rupees for the quarter owing to a surge in fuel costs.

India’s aviation sector is expected to become the world’s third-largest by 2025, with passenger numbers increasing six-fold over the past decade as a growing middle class take advantage of better connectivity and inexpensive flights.

But airlines have to navigate a fiercely competitive market, making it hard for carriers to pass on increased costs to consumers.

In August, India’s second-largest airline by market share, Jet Airways, reported a loss of 13.23 billion rupees (USD189 million) for the June quarter despite reporting profits previously.

© Agence France-Presse

LEAVE A REPLY

Please enter your comment!
Please enter your name here