Profitable IndiGo continues to buck trend

TD Guest Writer

Guest Writers are not employed, compensated or governed by TD, opinions and statements are from the specific writer directly

IndiGo operates a fleet of Airbus A320s
IndiGo operates a fleet of Airbus A320s

Low-cost carrier IndiGo continues to buck the trend of Indian airlines by reporting its sixth consecutive full-year profit.

IndiGo posted a net profit of INR3.17 billion (US$51.4 million) for the 2013-14 financial year, according to its most recent filed results, which were reported by the Economic Times.

And while this actually marks a decline compared to the INR7.87bn profit posted in the previous period, the result is still significantly better than low-cost rival SpiceJet, which posted a record INR10.03bn full-year loss in 2013-14.

IndiGo also experienced a strong 18% increase in full-year revenues, to INR111.17bn. And this marks a considerable achievement given the considerable headwinds being experienced by the Indian aviation industry. The industry is battling a series of problems, including low demand and currency fluctuations. As well as SpiceJet’s loss, full-service Air India and Jet Airways suffered huge losses of INR53.80bn and INR41.29bn respectively in 2013-14.

But IndiGo’s profits will give confidence to recently-launched AirAsia India. There are many similarities between the two carriers, including their business model, fleet type and expansion plans, and AirAsia will see IndiGo’s performance as concrete evidence that a true budget airline can succeed in India.

For other India airlines, it could be a wake-up call that they need to revise their operations.

Klook.com

EXPERT OPINION

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