IndiGo soars despite valuation air pocket

Geopolitical risks cloud InterGlobe Aviation's near-term outlook

- RAM PRASAD SAHU

InterGlobe Aviation, India's largest airline and the operator of IndiGo, posted its highest ever fourth-quarter profit, bolstered by lower unit costs and higher yields.

The airline's healthy operating performance was largely driven by a 24 per cent year-on-year (Y-o-Y) increase in revenue, with passenger revenue rising 25 per cent and ancillary income growing at a similar pace.

Operating profit margins before rentals and adjusted for forex changes stood at a robust 30.8 per cent. This was underpinned by a 2.2 per cent increase in yields to 5.32, aided in part by strong demand during the Mahakumbh. Passenger volumes surged 20 per cent Y-o-Y, while revenue passenger kilometres rose 23 per cent.

A key contributor to the margin expansion was a 6.6 per cent drop in fuel unit costs to ₹1.60 per seat kilometre, thanks to a 9 per cent decline in aviation turbine fuel (ATF) prices.