Indigo FY13 profit rises to Rs 993 crore

No-frill carrier IndiGo on Tuesday announced a whopping 516 per cent rise in gross profit at Rs 993 crore (Rs 9.93 billion) during 2012-13 compared to just Rs 64 crore (Rs 640 million) in the earlier fiscal.

Its revenue during the period grew by 65 per cent to touch Rs 9,458 crore (Rs 94.58 billion), as against Rs 5,718 crore (Rs 57.18 billion) during FY12.

"This is the fifth year in a row that we have posted profits since we broke even in 2008-09. We submitted our financial results to the Directorate General of Civil Aviation today as per the legal requirements," IndiGo CEO Aditya Ghosh told PTI in New Delhi.

During the last fiscal, the net profit of the company stood at Rs 787 crore (Rs 7.87 billion) with its EBITDAR (earnings before interest, taxes, depreciation, amortisation, and rent or restructuring costs) or the cash flow from operations at Rs 1,758 crore (Rs 17.58 billion), he said.

The airline is not a listed company.

The airline also saw a 39 per cent expansion in capacity since last year, as the number of its aircraft grew from 55 in March 2012 to 66 in March 2013.

It has now risen to 70.

It operates a single aircraft type -- Airbus A320-200s -- with a standard seating capacity of 180 passengers.

"The surge in profits and good performance of the company was a result of better fares -- there was no fare war last year, the yield was much better and there was an overall decline in the industry capacity due to the closure of Kingfisher Airlines," Ghosh said while listing out the reasons behind IndiGo's profitability.

He claimed IndiGo was "a debt-free company and we have no working capital loans."

Asked whether IndiGo was considering roping in a foreign partner in the wake of liberalisation of aviation FDI norms, Ghosh merely said "there is no compelling reason for us to look for more funds", indicating the current cash-rich

status of the airline.

To a question on Directorate General of Civil Aviation figures showing IndiGo's fares being higher than other airlines', he said its low fare buckets got filled up fast due to high demand for IndiGo flights.

"However, our average fares are the lowest in the industry, barring on few busy routes," the IndiGo chief said.

He also said the airline's load factor was higher at 81 per cent than the industry average of 74.6 per cent.

Indigo, like its competitors, was hit hard by high landing, navigation, parking and other airport charges.

Over and above, rising fuel prices and declining value of rupee vis-a-vis dollar posed a massive burden on the industry, almost 80 per cent of whose costs are dollar-based, he said.

Ghosh said any company with a high cost base or which is highly debt-ridden would be hurt the most by these factors.

"It is only in this industry that while the earnings of the airlines keep going down, the costs to the customer also go on rising," Ghosh said.

He attributed the rise in total revenue during 2012-13 "mainly to capacity expansion combined with improving yields."

The company's expenditure stood at Rs 8,465 crore compared to Rs 5,654 crore in 2011-12, a rise of 50 per cent, Ghosh said, adding that this was primarily a result of the rise in fuel prices and weakening of the rupee.

IndiGo has ‘consolidated its position’ in the domestic industry with a market share of 28.1 per cent in March 2013, up from 22.2 per cent in the same period of 2012, Ghosh said.