IndiGo, India’s biggest airline in terms of fleet size and passengers carried, has reported a profit for the fifth quarter running. As such, the budget carrier is forging ahead with its mission to capture a higher share of passenger traffic in the burgeoning Indian market.
According to an announcement made to the Indian stock exchange on Friday, February 2, 2024, the carrier’s net income rose a whopping 53% to 29.98 billion rupees ($362 million) in the three months ending December 31, 2023. By filing profits of this size, the airline has even exceeded analysts’ estimates of 21.27 billion rupees.
IndiGo’s revenues for the third quarter (Q3) also beat estimates at 194.5 billion rupees. This represents a 30% rise compared to the same period in 2022, and in the meantime, the carrier’s fuel bill rose by 18%.
The airline’s seat capacity rose 26.8% during the period and it is aiming to increase capacity by a further 12% in the fourth quarter when compared with the previous year. The carrier flew 24.3 million passengers between October and December 2023, which represents a hike of 23% year-on-year.
IndiGo is in the process of aggressively ramping up its capacity to seize a larger share of what is the world’s fastest-growing aviation market. It already boasts a market share of 62%, largely at the expense of fellow Indian carriers such as SpiceJet and Go Airlines. While SpiceJet is struggling financially and is locked in disputes with various aircraft lessors and other creditors, Go Airlines filed for insolvency and stopped operations entirely back in May 2023.
In 2023, IndiGo ordered over 500 new aircraft from Airbus SE, a move that will not only ensure its continued growth trajectory but may also shield it from a resurgent Tata-owned Air India.
However, things are not all going in IndiGo’s favor. Around 40 of the airline’s aircraft are currently grounded, due to the requirement for extended inspections on the Pratt & Whitney GTF engines that power its fleet of Airbus A320s and A321. The airline expects even more to be taken out of service as 2024 goes on. According to IndiGo’s Chief Financial Officer, Gaurav Negi, the carrier is currently in discussions with the RTX Corporation regarding compensation relating to potentially flawed components in the engines.
Negi has said that, in the meantime, IndiGo will consider introducing older, out-of-production A320ceo aircraft into its fleet to prevent capacity shortages due to these engine inspection issues and thereby continue its growth strategy.