While carriers such as Jet Airways and SpiceJet have been making news for the losses they have been incurring, IndiGo Airlines too has now crossed over to the dark side. On Wednesday, October 24, InterGlobe Aviation Ltd, the parent company of IndiGo Airlines, reported a loss of Rs 652.1 crore in the quarter ended September 2018, as per a regulatory filing.
This is the first time the airline has reported losses since its listing in November 2015. IndiGo is the country's largest carrier with a market share of over 40 percent and in the same period last year, it has reported a profit of Rs 551.6 crore.
The September 2018 quarter loss comes even though the carrier is said to have flown a higher number of passengers. Its revenue has increased 17 percent to Rs 6,185 crore, but the carrier's profits dropped due to high costs, which it wasn't able to pass on to the flyers.
Speaking of the losses, the airline in the filing said thus: "High fuel cost, rupee depreciation and intense competition significantly impacted profitability." However, IndiGo's co-founder and interim CEO Rahul Bhatia said that even though times are tough in the market, the carrier is "well-positioned."
"Despite this difficult environment, IndiGo remains well-positioned, thanks to our low cost structure and strong balance sheet," the Press Trust of India quoted him as saying.
Carrier urges employees to help cut costs
After reporting the loss, IndiGo is now said to be tweaking its plans for the near future and even asking its employees to help cut costs, besides being efficient and courteous. In an e-mail to the airline's employees, Bhatia expressed "disappointment" at the quarterly performance, but said that he was sure the carrier would be successful soon.
"We all have to sharpen our act even more and continue to focus on lowering our costs and providing on-time, courteous and hassle-free service that is essential for IndiGo to keep winning," PTI quoted the e-mail as saying.
More trouble for aviation sector?
IndiGo Airlines had consistently been making profits, unlike airlines such as Jet Airways and SpiceJet. However, since IndiGo posted a loss its impact is likely to fall on Jet and Spice Jet as well with its investors expected to mark down their expectations, according to LiveMint.
In the April-June quarter, Jet and SpiceJet posted losses and the trend is unlikely to change anytime soon with increasing competition, depreciating rupee and rising global crude oil prices.