IndiGo’s Q4 profits dip by 73%

Interglobe Aviation, which runs budget carrier IndiGo, posted a whopping 73.3% fall in net profit in the fourth quarter of 2017-18 due to high fuel prices and a weak rupee, but its full-year profit was still up as ticket sales jumped.

Net profit fell to Rs 117.6 crore in the fourth quarter from Rs 440.3 crore in the year-ago period while full-year profit leapt 35% to Rs 2,242.3 crore in 2017-2018 from Rs 1,659.1 crore in the previous financial year.

The airline’s fuel costs increased by 33.5% to Rs 2,337.7 crore in the quarter ended March 2018 compared with a fuel bill of Rs 1,750.5 crore the fourth quarter last year.

“We have reported our highest ever annual profit for fiscal 2018. We remain focussed on creating long-term shareholder value by building a large and profitable air transport network,” Rahul Bhatia, co-founder and interim CEO, said in a statement.

Total income of the airline, run by InterGlobe Aviation, for the entire year surged 23% to Rs 2,242.58 crore from Rs 1,656.98 crore in 2016-17 while total expenses rose 21% to Rs 2,084 crore during this period.

Total income for the quarter ended March 2018 was Rs 6,056.8 crore, of which passenger ticket sales accounted for Rs 5,019.3 crore, an increase of 17.7% over the corresponding period last year.

The results came days after former president Aditya Ghosh resigned suddenly on April 27 amid a spate of controversies ranging from customer manhandling to grounding of aircraft due to Pratt & Whitney engine glitches. Several news reports suggested Ghosh resigned because of these issues but both Ghosh and Bhatia denied the allegations

“As you all would be aware, Aditya Ghosh has resigned and will leave the company on July 31. Aditya wishes to explore starting a new business venture and we respect his decision to do so,” says Bhatia. “Our board of directors and I want to thank him for all his hard work and contributions for the successes that our company has enjoyed over the years.

The airline also walked out of the race for Air India, saying the terms of the divestment were difficult.

Bhatia says the company plans to go ahead with its growth plans and has been building the team for the same. He clarified that the company’s board will “consider” Greg Taylor’s appointment as the President of the carrier once they receive the necessary approvals.

“Since our last call, in addition to Wolfgang (Prock-Schauer), Raj Raghavan has joined us as our head of HR, Mike Swiatek as our chief planning officer, and Willy Boulter as our chief strategy officer,” says Bhatia.