Due to Coronavirus-Indigo sees impact on earnings

Due to Coronavirus-Indigo sees impact on earnings

COVID-19, which was first detected in Wuhan city of China last December, has spread across the globe, forcing airlines to suspend flights and ground aircraft. Indian carriers have limited exposure to China and Southeast Asia.

InterGlobe Aviation Ltd., the operator of India’s largest airline IndiGo, said it expects its quarterly earnings to be “materially impacted” as bookings have fallen over the past few days. “Daily bookings are down 15-20 percent week-on-week over the past few days. 

Indigo expects the coronavirus  (COVID-19) crisis and depreciation of the rupee to hit profit in the fourth quarter. Because of the spread of COVID-19 in the country , IndiGo, has issued the profit warning following a shortage in bookings.

Indigo cancelled flights to China and Hong Kong and reduced frequency to certain other Southeast Asian markets. Over the past few days, 15-20 per cent decline is seen in daily bookings. This is because Flight occupancy individuals and companies canceled events and postponed travel. Last-minute fares, too, have declined 20-25 per cent on key metro routes over a dip in demand.

InterGlobe Aviation, which runs IndiGo, had reported a threefold increase in its pre-tax profit to Rs 556 crore in the third quarter of financial year 2019-20 (FY20) on strong revenue growth.

While overall international operations contribute around 25 per cent of IndiGo’s revenue, the share of China and Southeast Asia markets was limited. Flights have been cancelled and bookings deferred following visa restrictions imposed by Saudi Arabia and Qatar, while Kuwait has suspended all flights to/from India for a week.