IndiGo Reports Record Quarterly Loss

IndiGo announced its biggest quarterly loss in history of 3,174 crore for the period April to June 2021 as passenger demand collapsed in the wake of the second wave of COVID-19. This quarter’s loss is even greater than the one IndiGo saw last year when flights were grounded for two months. IndiGo saw its passenger figures drop to record lows amid a second wave of COVID-19 that devastated India. The airline also took notable foreign exchange losses and lower than expected interest income. The rupee has been falling against the dollar and reached a new low in May, hurting IndiGo since it pays for key expenses such as leasing of aircraft in US dollars. However, these losses are only a small part of the airline’s larger operational struggles due to COVID-19. A statement from IndiGo said, “Our financial results for the first quarter were severely impacted by the second wave of COVID-19 pandemic. The number of passengers travelling declined sharply in the months of May and June 2021. With the second wave receding, we are seeing a measured recovery in bookings for July and August 2021.”

As India’s largest airline, IndiGo’s results paint a grim picture for the industry. Other airlines have already resorted to extreme measures to stay afloat, including huge pay cuts and even deferring salaries. The coming months will remain choppy for the airline industry and with no government support forthcoming, the recovery will take a while. The good news for airlines is that India is quickly opening up the domestic sector for flight operations. States are now allowing fully vaccinated travellers to fly without the need to take a test thereby boosting demand. Moreover, with international destinations such as the Maldives opening their doors once again, airlines have the chance to increase capacity and grow its revenues once again.