InterGlobe Aviation Ltd, which operates India’s biggest budget airline IndiGo, reported that its fiscal third-quarter profit dropped 25 per cent because of an increase in fuel costs and lower ticket prices.
Net profit fell to Rs 487.26 crores in the three months ended 31 December from Rs 657.29 crores a year earlier, the company said. Revenue rose by 16.8 per cent to Rs 5,158.42 crores from Rs 4,481.20 crores in the year-ago period as the company added planes and operated more flights.
IndiGo controls about 39 per cent share of the domestic market, with 126 planes and 854 daily flights.
In an analyst call on Tuesday, 31st January 2017, IndiGo said its yields or airfares were down 10 per cent in October, 20 per cent in November, 17 per cent in December and 10 per cent in January year-on-year.
IndiGo president Aditya Ghosh said the airline will continue to match the fares of rival airlines in each “fare bucket” in the coming months as well—a strategy started in the second half of last year.
During the quarter, 71.7 per cent of IndiGo flights were on time. The airline said its operational performance was impacted primarily due to adverse weather conditions, air traffic congestion at key airports and operational issues associated with its A320neo planes.
As a result of the drop in profit, the share price went on to decline by more than 8 per cent on the day that followed the Q3 filing. At 11.20 AM on 1st February 2017, IndiGo share price was seen trading at Rs 826.00, down by 8.53 per cent or 77 points to be precise.
IndiGo has been selected as one of the top 500 shares recommended by the research and analysis team of Dynamic Levels.
Get the historical share price performance of the share at IndiGo share price history.
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