IndiGo posts Rs.1,879cr loss, CEO signals fare hikes as fuel bill rises
New Delhi, Oct. 30 -- IndiGo CEO Willie Walsh on Thursday indicated that higher ticket prices were unavoidable after the airline reported a net loss of Rs.1,879 crore in the September quarter mainly due to pressure from elevated jet fuel prices and the depreciation of the rupee.
The loss narrowed from Rs.2,582 crore in the year-ago quarter but the airline's fuel bill rose 67.2% year-on-year to nearly Rs.9,967 crore, even as revenue from operations increased 25.9% to Rs.23,364 crore. Walsh, who took over as CEO in August, said despite raising fares and adding fuel surcharges, the airline had been able to recover only about 60% of the increase in the fuel bill.
Walsh said IndiGo would have to consider raising fares further to offset the rise, while trying to limit the impact on passengers. Walsh also said the airline would review its network and capacity as part of its efforts to offset the fuel price surge.
"I think the performance in the second quarter was very encouraging. Obviously we want to try and minimize the increase in fares that we are encountering... But we have no choice but to look to increase fares in an effort to offset some of the very significant increase that we've seen in the fuel bill," Walsh said.
Airlines are facing higher oil prices linked to the West Asia conflict, with aviation turbine fuel accounting for a significant share of operating expenses.
Walsh blamed an unusually high premium for jet fuel over crude oil, known as the crack spread, which he believes could persist....
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