IndiGo to introduce business class in flights this year

New Delhi: The country's largest airline IndiGo on Thursday reported more than doubling of its net profit to Rs 1,894.8 crore in the three months ended March 2024 and announced the introduction of business class in select routes this year.

The strong performance in the latest March quarter, which also marks six consecutive quarters of profitability, was fuelled by higher traffic, increased capacity and a favourable external environment.

For the year ended March 2024, the airline posted the highest annual net profit of Rs 8,172.5 crore on record total income of Rs 18,505.1 crore, according to a release.

After flying for nearly 18 years, the airline will introduce business class in select routes this year as it seeks to provide more options for passengers amid rising economic growth.

The airline will launch a 'tailor-made business product', the details of which will be unveiled around August that will also mark the 18th anniversary of the carrier.

The latest announcement also comes less than a month after the profitable carrier said it would buy 30 wide-body aircraft.

"It will create a desired option for many who are aiming to travel business, perhaps for the first time in their lives", the release said.

Available Seat Kilometre (ASK) is an indicator of capacity.

InterGlobe Aviation, the parent of IndiGo, recorded a profit after tax of Rs 1,894.8 crore for the fourth quarter of 2023-24 compared to Rs 919.2 crore in the same period a year ago, a release said.

The total income rose nearly 27 per cent to Rs 18,505.1 crore in the three months ended March 2024. It stood at Rs 14,600.1 crore in the year-ago period.

In the latest quarter under review, fuel costs increased 6.5 per cent while overall expenses climbed 22.3 per cent.

For the full year 2023-24, profit after tax touched Rs 8,172.5 crore against a loss of Rs 305.8 crore in 2022-23.

"Yield increased by 7 per cent to Rs 5.19 and load factor improved by 2.1 points to 86.3 per cent," it added.

According to the airline, it delivered another quarter of strong financial performance led by a range of initiatives and supported by the favourable external environment.

"FY24 has been a year of many remarkable achievements and milestones. For the full financial year 2024, we reported our highest-ever total income of around Rs 712 billion, with a net profit of around Rs 82 billion and a net profit margin of 11.9 per cent. The 4th quarter financial results were positive, making it all four quarters in FY24 profitable," IndiGo CEO Pieter Elbers said.

He also said the strong execution of the company's strategy has yielded consistent results.

For the March quarter, IndiGo said its passenger ticket revenues rose 25.5 per cent to Rs 15,600.9 crore, and ancillary revenues climbed 18.9 per cent to Rs 1,719.4 crore on an annual basis.

"Our current pending order book of a little short of 1,000 aircraft to be delivered up until 2035, gives us long-term visibility well into the next decade. The airline will receive a minimum of one new plane every week.

"This speaks a lot about India, probably, being the last frontier of aviation growth of such a high magnitude and the part IndiGo is poised to play in it," Elbers said during the conference call to discuss the results.

During the conference call, IndiGo Chief Financial Officer Gaurav M Negi said the number of aircraft on the ground is in the mid-70s, and as more damp leased planes are brought in, the situation will be mitigated further.

The planes have been grounded due to Pratt & Whitney (P&W) engines.

At the end of March, the airline had a fleet of 367 planes, including 13 on damp lease.

The airline, which started flying nearly 18 years ago, has about 1,000 planes on order and those are to be delivered through 2035.

IndiGo's domestic market share rose to 60.6 per cent in April, as per the latest official data. As of March this year, the total cash balance stood at Rs 34,737.5 crore, including Rs 20,823 crore of free cash.