IndiGo Expected To Report Heavy Q4 losses

India’s largest airline IndiGo is all set to announce its fourth-quarter result on June 2, 2020, for the fourth quarter that ended in March 2020. It is expected that the company will report heavy losses amidst the coronavirus pandemic. The domestic flights had come to a grinding halt and have been closed for the past 2 months. According to the analysts, IndoGo is expected to report a net loss of INR 1,750 crore in Q4 due to Mark to market (MTM) accounting losses that are worth INR 1,010 crore.

The domestic operations came to a halt after the nationwide lockdown was announced to deal with the Covid-19 pandemic. The decision came exactly a week after announcing a ban on international flights. The share prices of the company have taken a hit since the beginning of the year since people have been avoiding unnecessary travel in the wake of the pandemic. IndiGo has been facing a major cash crunch because a major part of its revenue comes from passenger flights and not the cargo flight (the only ones that were permissible during the lockdown).

The shares of IndiGo have plummeted by 27.51% since the beginning of Q4, till date. The company recovered a little with a 3% rise on 13 May. According to the DGCA (Director General of Civil Aviation), the domestic air travel was reduced to 77.62 lakh against 1.15 crore on a YoY basis. This has meant a huge 33% reduction in air travel for the corresponding period of the previous year.

The company had refrained from any job cuts or salary deductions for March and April in light of the call from PM Narendra Modi to not cut salaries of people. But buried under losses, even India’s largest domestic airline company had to announce pay cuts ranging from 5% to 25% for May.