By Nandan Mandayam and Meenakshi Maidas
(Reuters) -India’s largest airline IndiGo said on Friday it expects to have about 40% of its grounded fleet in the air by April, after costs related to unused aircrafts dragged the budget carrier to its first quarterly loss in two years.
“We expect aircraft on ground to reduce from high-60s currently to under 60 by the end of 2024 before dropping to the 40s by April,” IndiGo’s chief financial officer Gaurav Negi said in an earnings call.
The low-cost carrier swung to a loss of 9.89 billion rupees ($117.7 million) for the three months to Sept. 30, compared with a profit of 1.88 billion rupees a year ago.
The loss was driven by grounded fleet-related and fuel costs, according to Negi and the airline’s CEO Pieter Elbers.
IndiGo has a nearly 63% market share in India and is also Asia’s biggest carrier by market valuation.
India, the world’s fastest growing aviation market over the last two years, aims to become a global aviation hub, with airlines, including IndiGo, placing record jet orders.
The carrier, which has 410 aircraft under its wings, expects capacity measured in available seat kilometres to grow by low-double-digit percentage in the third quarter from a year earlier.
IndiGo is also bracing for its departure from an all-economy cabin when it introduces its first-ever business class on select domestic routes next month.
Issues with engines made by Pratt & Whitney had grounded more than 70 of its aircraft in November last year, weighing on its bottom line, as the airline extended leases on older jets and hired more new ones.
Its overall expenses jumped 22% for the September quarter, outpacing a 13.6% rise in revenue.
Fuel expenses rose about 13%, while supplementary aircraft rental and maintenance costs jumped nearly 30%.
Costs from newer aircraft and engine rentals jumped nearly four-fold.
($1 = 84.0560 Indian rupees)
(Reporting by Meenakshi Maidas and Nandan Mandayam in Bengaluru; Editing by Janane Venkatraman and Mrigank Dhaniwala)
