IndiGo, India’s foremost airline in terms of fleet size and market share, is poised to achieve unprecedented financial success, potentially marking the highest-ever profit by an airline in Indian skies.
As the airline prepares to unveil its third-quarter FY24 earnings on February 2, industry experts are eager to witness the outcome of a quarter that witnessed historic highs in Indian air traffic.
The timing of the earnings announcement is intriguing, coinciding with the airline’s strategic move to withdraw certain A320neo family planes, making adjustments to address additional groundings. Despite these operational shifts, the results are anticipated to reflect the immense passenger demand during the quarter, driven not only by year-end holidays but also by the cricket world cup final in Ahmedabad, resulting in soaring fares and impressive occupancy rates.
IndiGo recently achieved a significant milestone, surpassing the mark of ferrying 100 million passengers in the calendar year, with aspirations to replicate this success in the current fiscal year. To address aircraft shortages, the airline plans to induct a mix of wet and dry leased planes, with the former already in operation.
Examining the numbers, the third quarter saw a sequential growth of 4 percent, with a remarkable year-on-year increase of 22 percent in domestic passengers. IndiGo closed the quarter with a dominant domestic market share of 62.1 percent. On the international front, the airline is estimated to have carried about 31 lakh passengers in the quarter, a record high for IndiGo.
Despite challenges such as fluctuating ATF prices and the grounding of over 80 aircraft due to Pratt & Whitney engine issues, IndiGo remains resilient. The airline strategically implemented fare adjustments, adding a fuel charge that was later withdrawn in January. The third quarter is anticipated to mark a historic revenue milestone, with projections exceeding INR 17,000 crore in total revenue from operations.
With fierce competition, notably from Air India Express, which is rapidly expanding its fleet, IndiGo faces challenges unseen since its inception in 2006. However, with a profitable first quarter and a strong third quarter on the horizon, the airline is on track to close the financial year with a profit unparalleled in Indian aviation history.
As the management reveals its plans on February 2, the industry awaits insights into how IndiGo plans to navigate the competitive landscape and sustain its remarkable trajectory.