IndiGo’s shares experienced a downturn following its decision to eliminate fuel charges from all flights, a move prompted by the government’s consistent reduction in Aviation Turbine Fuel (ATF) prices.
What Happened? “As ATF prices are dynamic, we will continue to adjust our fares and components thereof, to respond to any change in prices or market conditions,” IndiGo said in a statement shared with PTI.
Initially, the airline introduced these charges in October 2023 amidst surging ATF costs. This strategic change positions IndiGo in a new financial landscape.
The parent company, InterGlobe Aviation, saw a drop in its stock value immediately after the news. However, it is worth mentioning that ATF prices account for a significant portion of operating costs for aircraft operators and this reduction is likely to alleviate financial stress on airlines.
IndiGo’s financial health remains robust, as evidenced by its recent profit report and income growth. IndiGo reported a consolidated net profit of ₹188.93 crore for the quarter ending September 30. The airline achieved a 19.57% increase in its revenue from operations, reaching ₹14,944 crore, up from ₹12,498 crore in the same period last year.
However, the airline faces operational challenges, including the grounding of some aircraft due to engine issues.
Price Action: Interglobe Aviation Ltd. shares were trading 0.82% lower at ₹2,966.05 at midday on Thursday.
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