InterGlobe Aviation posts Rs 1,062 crore quarterly loss

IndiGo's parent InterGlobe Aviation posted a net loss of Rs 1,062 crore for the September quarter.

New Delhi: Budget carrier IndiGo's parent InterGlobe Aviation on Thursday posted a net loss of Rs 1,062 crore for the September quarter, mainly on account of higher costs related to operating lease liabilities.

The company had a loss of Rs 651.5 crore in the same period a year ago.

According to a release, InterGlobe Aviation's total income rose 31 per cent to Rs 8,539.8 crore in the second quarter of the current fiscal.

In the year-ago period, the same stood at Rs 6,514.1 crore.

IndiGo CEO Ronojoy Dutta said that while revenue performance was much better during the September quarter, the losses were accentuated by forex losses on operating lease liabilities created under Ind AS 116, and re-assessment of accrual estimates for future maintenance cost.

Indian Accounting Standard 116 or Ind AS 116 has come into effect from April 1 and pertains to principles for recognition, presentation and disclosure of leases.

The standard would have a significant impact on various industries such as airlines, where aircraft operated are mostly on lease.

The loss before tax stood at Rs 1,031.8 crore in the latest September quarter where it was Rs 987.2 crore in the year-ago period.

"Mark-to-market losses on capitalised operating leases of Rs 4,282 million and higher maintenance cost of Rs 3,190 million significantly impacted profitability," the company said.

During the September quarter, yield or average fare paid per passenger increased by 9.4 per cent.

Total cost jumped nearly 28 per cent to Rs 9,571.6 crore in the three months ended September.

"We remain focused on our growth plans and are expanding both domestically and internationally," Dutta said.

IndiGo is the country's largest airline in terms of domestic market share.

At the end of September, IndiGo had a total cash balance of Rs 18,736.2 crore, including Rs 8,706.3 crore of free cash.

The total debt, including the capitalised lease liability, stood at Rs 19,841.8 crore.

"Post servicing of debt and lease obligations, IndiGo generated Rs 33,340 million through its operating activities for the half year ended September 2019," the release said.

The airline had a fleet of245 planes, including 129 A320 ceos, 89 A320 neos, 6 A321 neos and 21 ATRs. It had services to 77 destinations, including 19 international ones, at the end of September.

Shares of InterGlobe Aviation rose nearly one per cent to close at Rs 1,668 apiece on the BSE.

Meanwhile, IndiGo promoters -- Rahul Bhatia and Rakesh Gangwal -- are at loggerheads on differences over certain issues. The feud came into the public in July when Gangwal had sought Sebi's intervention in alleged corporate governance lapses at the company.

On October 1, Bhatia and his group InterGlobe Enterprises sought arbitration proceedings in London.

In deepening rift between the two, who were long time friends, Bhatia has also filed petitions in US courts seeking evidence from Gangwal and InterGlobe Aviation's independent director Anupam Khanna for the arbitration proceedings.