IndiGo parent says high fuel prices cloud revenue recovery – ET TravelWorld

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IndiGo parent says high fuel prices cloud revenue recovery
InterGlobe Aviation Ltd said that it was seeing a gradual recovery in revenue to pre-pandemic levels as travel demand rebounds, but warned that steep fuel prices were a concern after its quarterly loss widened. High fuel prices pose a threat to a recovery in the pandemic-battered aviation industry across the globe, with US airlines warning a complete return to profit may be delayed as higher prices overshadow strong demand.

Revenue is fast returning to normalcy and passenger load factor, or the passenger carrying capacity being used, is expected to be around 76 per cent in October, but fuel prices are worrisome, Chief Executive Officer, Ronojoy Dutta, said in a post earnings call.

Ronojoy Dutta, during a conversation on CAPA Live virtual session, said that his airline will continue to grow in the domestic market but with a faster expansion in the international domain.

Average revenue booked per day in October was the same as it was in pre-pandemic January 2020, even though the airline was operating at 20 per cent less capacity, Dutta added. IndiGo‘s yields, or the number of rupees earned for each passenger-kilometer flown, grew 20.4 per cent to 4.19 rupees compared with the previous quarter, and Dutta said he expects higher yields to be sustainable going forward.The company, which has reported losses since 2020, said cash burn in the second quarter was 200 million rupees a day, down 37 per cent from the previous quarter. InterGlobe’s aircraft fuel expenses in the quarter soared 207.8 per cent to 19.89 billion rupees in the reported quarter, and total expenses surged 71.4 per cent, the company said.

With Covid-19 cases falling and vaccination rates increasing, India has started easing travel restrictions over the past few months.

IndiGo’s net loss widened to 14.40 billion rupees (USD 192.32 million) in the three months to September 30, from 11.95 billion rupees a year earlier. Revenue from operations, however, rose 104.6 per cent as Covid-19 vaccination rates picked up and the government eased most air travel-related curbs.

Earlier this month, India allowed airlines to fly at full capacity in the country for the first time since the onset of the pandemic.



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