India's IndiGo moves to preserve cash after first quarterly loss

InterGlobe Aviation Ltd’s IndiGo has pushed back plans to own Airbus A320neo planes to preserve cash and will continue to lease them, its interim CEO said on Wednesday after the company posted its first quarterly loss since 2015. Higher fuel prices and a weaker rupee have pushed up costs at Indian airlines including IndiGo, the largest domestic carrier by market share, while intense competition has limited its ability to raise fares, putting pressure on yields. “At times when there is a little uncertainty we want to be prudent with cash, so right now we are holding off buying any A320s with cash and continuing to rely on sale and leaseback,” Rahul Bhatia said. IndiGo already owns ATR planes using free cash and had plans to own some A320neo aircraft as well but has now put the decision on hold and will review it in future, Bhatia said. India is the world’s fastest-growing aviation market but the surging fuel prices, weak currency and competition is putting pressure on airlines’ ability to make money despite 20% annual growth in domestic air traffic. InterGlobe reported a loss of 6.52b rupees ($89.1m) for the quarter ended Sept. 30 - its first since listing on the stock exchange in November 2015 - while revenue from operations rose 16.9%. Total expenses soared 58.2% to 75.02b rupees, with aircraft fuel expenses surging 84.3% and foreign exchange losses widening over seven-fold.<br/>