Introduction

Interglobe Aviation, operating under the brand IndiGo, was established in 2006 by founders Rahul Bhatia and Rakesh Gangwal. As of now, IndiGo is the largest player in the Indian aviation market, holding a significant 60.6% market share. The airline has built its reputation by providing low-cost yet high-quality services, aiming to become a global leader and turn India into an international aviation hub.

Growth and Fleet Expansion

In FY19, IndiGo became the first Indian airline to operate 1,500 daily flights and had a fleet of 250 aircraft. By FY23, it expanded its fleet to 367 aircraft, achieving another milestone by carrying over 100 million passengers in a single fiscal year. As of FY23, IndiGo employs 32,407 people and maintains an extensive network covering numerous domestic and international destinations.

Fleet Details

IndiGo's fleet comprises a variety of aircraft tailored to different route demands:

- A320 neo: 192 aircraft with 180 to 186 seats

- A320 ceo: 31 aircraft with 180 seats

- A321 neo: 94 aircraft with 222 to 232 seats

- ATR: 45 aircraft with 39 seats

- A321 freighter: 3 aircraft with a 27-tonne cargo capacity

- B777-300ER: 2 aircraft with 400 seats (damp lease)

Operational Highlights

IndiGo operates over 2,000 daily flights to more than 30 international destinations and numerous domestic routes, connecting 500 cities globally. In FY23, the airline expanded its domestic network to 88 destinations with over 400 routes and added 10 new destinations. Internationally, it operates 100 direct routes to 33 destinations from 18 Indian cities, increasing its international routes by 25%.

In FY23, IndiGo flew over 1,800 flights daily, ranking as the 7th largest airline globally in terms of daily departures. The airline continues to expand, with five new domestic destinations and two international destinations added recently.

Cost Management

IndiGo has maintained its position as a low-cost airline by efficiently managing expenses. In FY24, total expenses increased by 12.5% to ₹631,819 million, while the cost per available seat kilometer (CASK) excluding fuel and forex increased by 4.3%. Despite rising costs, the airline successfully reduced fuel expenses from ₹2.07 in FY23 to ₹1.72 in FY24, highlighting its commitment to cost optimization and shareholder value.

Financial Performance

Pre-COVID-19

Before the pandemic, IndiGo experienced robust financial growth. In FY20, revenue grew at a CAGR of 20.76% over five years, reaching ₹35,756 crore, up from ₹28,496 crore in FY19. However, net profit saw a significant decline from ₹2,242.37 crore in FY18 to ₹156.14 crore in FY19 due to rising expenses, including a 46.7% increase in employee costs and a 41.5% rise in aircraft ownership expenses.

During COVID-19

The pandemic severely impacted IndiGo's financials, with revenue plummeting by 59.06% in FY21 due to travel restrictions and lockdowns. The net loss escalated from ₹248.16 crore in FY20 to ₹5,829.79 crore in FY21. Although revenue increased by 77.12% in FY22, net loss further widened to ₹6,171.03 crore, primarily due to higher operational expenses.

Post-COVID-19 Recovery

IndiGo began recovering in FY23, doubling its revenue compared to the previous year and significantly reducing its net loss from ₹6,171.03 crore in FY22 to ₹316.72 crore. Measures such as salary cuts and deferred expenses helped stabilize the financial situation.

Current Financial Status

In FY24, IndiGo reported a revenue of ₹712,230 million, a 27.5% increase compared to FY23, and achieved a profit of ₹82,000 million. The airline also recorded an EBITDAR of ₹175.4 billion, a significant rise from ₹73.1 billion in FY23. Key financial metrics include a market cap of ₹165,941 crore, an EPS of ₹211.70, and an operating profit margin of 17.73%. 

* All financials are is in INR Cr and price data in INR

* All financials are is in INR Cr and price data in INR

Promoter Activity

Recently, promoter Rahul Bhatia's family sold a 2% stake, totaling 77 lakh shares, at ₹4,362 per share, amounting to ₹3,367 crore. This sale, the first since the IPO, is intended to fund expansion in the hospitality sector, particularly in Europe.

* All financials are is in INR Cr and price data in INR

Future Plans

IndiGo has ambitious plans for future growth:

- Signed a deal with Airbus for 500 A320 neo family aircraft worth $55 billion, with deliveries between 2030 and 2035.

- Added 65 aircraft to its fleet in FY24 and plans to double its capacity in FY25.

- Aiming for a 10-12% capacity increase year-over-year.

- Planning to expand its fleet to 1,000 aircraft by 2035.

- Entered into codeshare agreements with British Airways, Malaysian Airlines, and Qantas to enhance its international network.

- Ordered 30 Airbus A350-900 aircraft with an option for 70 more for future international routes.

Peer Comparison

Conclusion

IndiGo has shown remarkable resilience and growth, turning a net loss into a substantial profit in FY24. With strong fundamentals, effective cost management, and strategic expansion plans, IndiGo is poised for sustainable growth. The airline aims to double its size by 2030, bolstered by a significant aircraft order and an expanding route network, ensuring its position as a leading player in the global aviation industry.