InterGlobe Aviation Limited, commonly known as IndiGo, is an Indian low-cost airline headquartered in Gurgaon, Haryana, India. It is the largest airline in India by passengers carried and fleet size, with a 57% domestic market share as of October 2022. It is also the largest individual Asian low-cost carrier in terms of jet fleet size and passengers carried, and the fourth largest carrier in Asia. The airline has carried over 300+ million passengers as of November 2022.
The airline operates 1,600 daily flights, as of November 2022 to 101 destinations – 75 domestic and 26 internationals. It has its primary hub at Indira Gandhi International Airport, Delhi. IndiGo has been ranked as the 4th most punctual airline globally in 2018, 6th most punctual airline globally in 2019 and 3rd most punctual airline globally in 2021 by OAG Punctuality League.
The December quarter (Q3FY23) has been profitable for InterGlobe Aviation Ltd aided by strong seasonality as the company faced challenges of 3 consecutive quarters reported with losses. The company has reported a consolidated net profit of Rs 1418 crore in the last quarter as compared to a loss of Rs -1585 crore in the September quarter and Rs 128 crore in the corresponding third quarter of the previous fiscal year.
IndiGo’s management reported that the bookings are sturdy for the current March quarter despite yield would display the impact of seasonality. Considering this hindrance, IndiGo hopes to accomplish FY23 operationally profitable, by the exclusion of the impact of foreign exchange loss.
The fall in aviation turbine fuel (ATF) prices is soothing for IndiGi as domestic ATF costs are down by 6.3% sequentially in the March quarter till date as it helps airlines to leave out margins for lower fares and generate demand. The trends for demand have been colourful. The number of passengers carried by domestic airlines in December has risen up by 9% sequentially, as reported by the Directorate General of Civil Aviation (DCGA) data.
The sturdy demand has assisted IndiGo’s yield jump to a multi-quarter high of ₹5.37 in the previous quarter. Considering the international markets, the airline functions at 105% of its pre-covid capacity. International services account for 23% of capacity in terms of available seat kilometres. IndiGo aims to take this share to 30% in the next year, which will boost the overall yield.
The fleet strength as of December-end was reported at 302. Amongst the reported strength, 238 are fuel-efficient new engine option (neo) aircraft, which provides IndiGo with a cost advantage. As of December-end, IndiGo’s cash balance was computed at ₹21,925 crore. This is helpful amid the entry of new airlines and rising competitive intensity. This displays a presence of threat to the airline’s market share, which was about 55% in December, according to DGCA.
IndiGo is in talks with both Boeing and its current supplier Airbus to order more than 500 passenger jets, potentially smashing an industry record set by domestic rival Air India in the past few weeks.
IndiGo stock price has corrected down to the 50% retracement level where it received support on two separate occasions as the price had also approached the 200-day exponential moving average. The weekly MFI is at 22 points which marks the stock as oversold for the mid-term. Investors may accumulate the shares of the market leader in airlines if the price corrects down to the 38.2% retracement level or the 50% retracement level.
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