IndiGo eyes more foreign flights as forex losses sting

India's largest airline IndiGo is looking to fly more overseas routes that generate foreign currency, following a bleak quarter when forex losses widened its losses.

- Abhishek Law

The airline's lease costs jumped over tenfold in the September quarter as the rupee fell against the dollar. Since lease payments are made in dollars, a 1.7% depreciation during the quarter caused a forex loss of ₹2,892 crore during the period, IndoGo said, against a forex loss of around ₹240.6 crore a year earlier

The company reported a ₹2,582 crore net loss in the September quarter, against ₹2,176 crore profit in the June quarter, and a loss of ₹987 crore a year earlier.

Chief executive Pieter Elbers said that as a strategy, the airline was looking at "internationalization", which included flying to more destinations that generate "non-rupee revenues" in euros, pounds or dollars. "This provides us with a natural hedge against currency fluctuations," he said.

Revenue fell 10% sequentially to ₹18,555 crore, with international destinations providing a hedge against a slowing domestic market traffic in the seasonally weaker quarter, marked by weather-related disruptions and geopolitical tensions. In the June quarter, revenue stood at ₹20,497 crore. Revenues were up 11% over the year-ago period.

Excluding the impact of forex changes, IndiGo made a profit of ₹104 crore during the September quarter, against a ₹2,347 crore profit in the June quarter, and a loss of ₹754 crore a year ago.