May 2, 2018 / 10:41 AM / a year ago

Surging costs hit IndiGo-owner InterGlobe's fourth-quarter profit

Women spread fryums for drying on a rooftop as an IndiGo Airlines aircraft moves on the runway after landing at the Sardar Vallabhbhai Patel international airport in Ahmedabad, July 6, 2017. REUTERS/Amit Dave/Files

(Reuters) - InterGlobe Aviation Ltd, owner of India’s top carrier IndiGo, reported a 73 percent slump in fourth-quarter profit on Wednesday, dragged down by higher expenses and fuel costs.

Total expenses jumped 30.2 percent to 58.91 billion rupees ($884 million), including a 33.5 percent increase in fuel costs in the January-March quarter.

Profit dropped to 1.18 billion rupees, from 4.4 billion rupees a year earlier, InterGlobe said in a statement.

IndiGo also had to cancel hundreds of flights in March when several in-flight engine failures prompted India’s aviation regulator to ground eight of the airline’s Airbus A320neo aircraft fitted with certain Pratt & Whitney engines.

The airline managed to transfer passengers to other flights, however, minimising revenue losses.

Revenue per available seat kilometre - a measure of its operating earnings - fell over three percent to 3.40 rupees in January-March. Passenger yields, which gauge the average fare paid per mile per customer, dropped over five percent.

However, IndiGo expects a 25 percent rise in available seat kilometres, a measure of the airline’s passenger carrying capacity, in the fiscal year that began on April 1.

The company announced on Friday that its president, Aditya Ghosh, would step down after 10 years with the company and it would consider naming Gregory Taylor, an airline sector veteran, as his successor in the coming months.

($1 = 66.6775 Indian rupees)

Reporting by Tanvi Mehta in Bengaluru; Editing by Himani Sarkar/Jason Neely/Susan Fenton

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