Indigo – A glimpse of resurgence

InterGlobe Aviation Limited (commonly known as IndiGo) is an Indian low-cost airline headquartered in Gurgaon, Haryana. It is the largest airline in India by passengers carried and fleet size, with a 57.5% domestic market share as of April 2023. 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 company employs about 32,000 personnel.

The airline operates about 1,500 daily flights to 101 destinations – of which 75 are domestic and 26 are international. It has their primary hub at Indira Gandhi International Airport, Delhi.

IndiGo has been ranked as the 4th most punctual airline globally in 2018. Also, the 6th most punctual airline globally in 2019 and the 3rd most punctual airline globally in 2021 by OAG Punctuality League.

Quarterly Growth Walkthough

IndiGo has sealed FY23 with a profit in the March quarter Q4FY23. However, the recuperation was deficient to mitigate the drawdowns of the loss from the first half of the financial year H1FY23.

IndiGo reported a consolidated net profit of Rs 916 crore for the March quarter. The profit has been the highest ever historically for the March quarter as air travellers tremendously surged. The total consolidated income of the March quarter was registered at Rs 14,100 crore which is a massive growth spike of about 75% as compared to the March quarter of the previous financial year.

The March quarter of FY22 faced the consequences of the swift circulation of the Omicron variant of COVID19. Hence the spirit of the air voyage was very thin. Alas, IndiGo registered a loss of Rs 1,680 crore and a total income of Rs 8,021 crore during the March quarter of FY22.

InterGlobe computed a yield (revenue earned per passenger flown per km) of Rs 4.85 / km during the March quarter, as against Rs 4.40 / km in the March quarter the previous year.

According to data from the civil aviation regulator Directorate General of Civil Aviation, the average daily air passenger traffic was registered at 420,000, which has surpassed the traffic in the pre-pandemic year of 2019, which is also greater than the traffic in the March quarter of FY22.

IndiGo’s fleet stands with a total of 304 aircrafts. This comprises of 21-A320 NEOs (current engine config.), 162-A320 NEOs (new engine config.), 79-A321 NEOs, 39-ATRs, 2-A321 freighters and 1-Boeing 777 on a wet lease. The airline has supplemented its fleet with 2 aircrafts during the quarter. IndiGo stated that the number of its grounded planes is less than 40.

Word from the Board

IndiGo’s CEO Pieter Elbers stated that “Demand remains strong with healthy yield. Forward bookings are very encouraging. We aspire to grow to north of mid-teens in the next financial year. Directionally, the situation is stable but not improving”.

Agenda & Outlook

IndiGo plans to double its size and scale within the current decade. The airline has flown 8.5 crores passengers in FY23 and aims to grow passenger traffic within their colony to 10 crores in the current financial year, as demand remains invigorating supported by the booking numbers.

Investors should understand that the share price of IndiGo is very expensive currently as its price is trading near its 52-week high. Additionally, rivalry is heating up in the domestic aviation sector with the admission of Akasa airlines and the revival of the Air India group.

Disclaimer: We do not endorse or encourage you to take trades or investment decisions based upon our posts/research, all of your trading and investment activities are your own and should be taken through consultation with reputed financial advisors. The analysis posted on this website has been created by involving multiple mediums which are present over the Internet.

Leave a Reply