IndiGo Q3 result: Profit soars as air travel recovers from Covid

IndiGo has been contending with surging fuel costs and currency volatility that hit profit for the past three quarters.

InterGlobe Aviation Ltd, the operator of India's top airline IndiGo, on Friday reported an eleven-fold jump in quarterly profit led by a pick up in demand for air travel.

IndiGo profit came in at 14.18 billion rupees ($173.22 million) in the quarter that ended December 31.

The airline has been contending with surging fuel costs and currency volatility tha t hit profit for the past three quarters.

However, a sharp recovery in demand for air travel to near pre-Covid levels in the domestic and international markets more than offset the fuel expenses.

IndiGo projects capacity in available seat per kilometre this quarter to expand to around 45% from a year earlier.

Yields, a metric for profitability, rose 21.9% to 5.38 rupees per kilometre from a year earlier, while the carrier's load factor, or the passenger carrying capacity being utilized, improved 5.4 percentage points to 85.1%.

"It was a very strong quarter on the demand side and IndiGo performed very well. We are now back at meaningful levels of profitability," Chief Executive Officer Pieter Elbers said in a conference call with analysts and investors.

The company's profit came in at 14.18 billion rupees ($173.22 million) in the quarter that ended December 31, from 1.28 billion rupees a year earlier.

Revenue from operations surged about 61% to 149.33 billion rupees.

India's aviation industry is rebounding from the throes of a pandemic-induced slowdown after travel demand fell off. The industry is now facing intense competition with the entry of a slew of new airlines. The country's newest budget carrier Akasa Air took to the skies last August, while Tata Group-backed Air India is expanding its fleet.

Last month full-service carrier Vistara, a joint venture between Tata Sons and Singapore Airlines, reported its first ever quarterly operating profit on the back of on travel demnd.