BENGALURU – Shares of Interglobe Aviation Ltd, the operator of India’s biggest airline IndiGo, fell as much as 4.6% on Wednesday, a day after the company posted a record quarterly loss as the COVID-19 pandemic weighed on a nascent recovery.
The New Delhi-based airline’s daily average cash burn increased to 334 million rupees in the quarter, and it said scheduled international operations still remained a challenge.
Yields, a metric for profitability, dropped 23.2% to 3.48 rupees in the first quarter, with the company cautioning that the metric would remain under pressure until demand recovers.
“Even as per our airfare tracker, airfares in May’21 tumbled to last year levels and are hovering around average floor bands since the start of Jun’21,” analysts at Motilal Oswal said, calling it a “scathing concern.”
Chief Executive Officer Ronojoy Dutta told reporters in a post-earnings call on Tuesday evening that he expects capacity to return to pre-pandemic levels by the end of the year but warned that a third wave of infections could swiftly disrupt things again.
Capacity for the first quarter was up by 433.2% compared to the same period last year, when the company’s operations came to a near standstill as India went under a lockdown to curb the spread of the virus.
For the first quarter ended June 2020, capacity was down 90.9% compared to the same period a year earlier.
The company’s net loss swelled to 31.79 billion rupees ($426.84 million) in the latest reported quarter, from 28.49 billion rupees a year earlier. This marked the company’s sixth consecutive quarterly loss.
IndiGo has reported losses since the pandemic brought global travel to a near-halt and battered airlines worldwide. Just as the airline showed signs of recovery, the sector was hit by the renewed travel restrictions.
($1 = 74.4780 Indian rupees)