IndiGo makes Rs 88-cr operating loss

Last Updated: Fri, Dec 14, 2012 03:40 hrs

IndiGo , the country's first domestic air carrier by market share, had an operating loss of Rs 87.7 crore after operating revenue of Rs 5,552 crore last year, according to the answer tabled in Parliamaent yesterday, in reply to an unstarred question. The operating expense was Rs 5,640 crore.

Airlines earn from sale-leaseback and other ancillary sources, treated as non-operating income. Many make money on this income. Reacting to the statement, a spokesperson of IndiGo replied to an SMS on the subject with, "We are profitable." Asked if the profit was due to sale, leaseback and other non-operating income, the spokesperson did not reply.

The high-cost environment of Indian aviation has always been a concern. The sales tax of around 24 per cent on aviation turbine fuel (ATF) is the highest in the world after Bangladesh. The ATF cost rose 10-12 per cent in 2011-12 and is 40-50 per cent of input cost.

IndiGo started spreading its wings on international routes since September 2011. It is now flying to five international destinations -Bangkok, Dubai, Muscat, Kathmandu and Singapore. In 2011-12, operating revenue rose 45 per cent, while operating expenses rose 75 per cent over 2010-11. In the latter year, operating expenses and revenue both grew 47-49 per cent as compared to 2009-10. With the civil aviation ministry allocating traffic rights to Indian carriers for the next three seasons, IndiGo will be operating 172 services a week by next winter, as compared to 116 now, according to a ministry statement. SpiceJet, another low cost carrier, has planned to expand its service by 228 per cent but IndiGo seems more cautious, with a 48 per cent addition.

More from Sify: