InterGlobe Aviation posts 24% hike in PAT

MUMBAI: InterGlobe Aviation which operates India's biggest airline by market share IndiGo Friday posted a 24% increase in its net profit as finance income from its rich cash reserves offset a weaker operating performance than the corresponding period last year.

The airline posted a net profit of Rs 139.8 crore in the July-September quarter, compared to Rs 113.1 crore a year earlier.

The airline's total revenue increased 18% to Rs 4166.9 crore, pushed by demand for its flights. The airline's load factors increased to 82.2% from 78.4%.

But its yield remained under pressure. During the July-September quarter, IndiGo net earned Rs 3.28 per kilometer of flying, down 11.1% from last year.

Its operating profit almost halved to Rs 76.8 crore during the quarter. IndiGo's other income--consisting of finance income on mutual funds etc that it earned from its cash reserves--increased 63% to Rs 160.8 crore propping up its net profit. As of September 30, IndiGo's cash reserves that totalled Rs 6857.2 crore,

ET had on August 18 analyzed that the honeymoon period of profitability for airlines may soon come to an end as
cutthroat air fare wars and heavy discounts across the year hit their bottom lines and all but negate the positive impact of lower fuel prices.

In a post-earnings conference call, the management said the airline added nine aircraft during the quarter. It will end this fiscal with 136 planes, of which 20 will be A320 neos. The net increase will be 28%, down from a 34% increase in annual fleetsize estimated earlier.