By Hritam Mukherjee
(Reuters) -Budget airline IndiGo posted slower first-quarter revenue growth on Wednesday, weighed down by subdued demand following border tensions between India and Pakistan and a fatal Air India crash during the quarter.
India’s largest carrier by market share reported a 4.7% rise in revenue to 204.96 billion rupees ($2.34 billion) in the April-June quarter, a sharp slowdown from the 17.3% growth logged a year ago.
“The June quarter was shaped by significant external challenges that created headwinds for the entire aviation sector,” Chief Executive Pieter Elbers said in a statement.
An April attack on civilians in Indian Kashmir, followed by border clashes between India and Pakistan led to “hundreds and hundreds of cancellations”, Elbers said in a post-earnings media call.
India has blamed Islamabad for the attack, which the latter has denied.
Shortly after, an Air India plane crashed in Ahmedabad and killed 260 people in June, spurring flying anxiety among many travellers.
“All in all, that has led … to (have) some impact on the market,” Elbers said, but added that so far, the second quarter appears to be stabilising.
Despite the recent slowdown, IndiGo has benefited from rising incomes, sustained post-pandemic domestic travel demand, along with continued fleet and network expansion.
Still, the company posted a lower quarterly profit, bogged down by ballooning foreign exchange losses. Its yield – the average money earned from a passenger for every kilometre travelled – fell 5%.
The airline’s first-quarter capacity – measured in available seat kilometres – grew 16.4% on-year. The firm had projected a “mid-teens percentage range” growth in May.
($1 = 87.4350 Indian rupees)
(Additional reporting by Abhijith Ganaparavam in New Delhi; Editing by Nivedita Bhattacharjee and Sonia Cheema)
