NEW DELHI/BENGALURU - Interglobe Aviation, the owner of budget Indian airline IndiGo, forecast a strong year ahead on Monday, after the collapse of Jet Airways Ltd helped the company report a fivefold jump in profit for the fourth quarter.
IndiGo, the country's largest airline by market share, gained passengers in recent months given funding woes at Jet Airways Ltd, which started grounding its fleet early this year. Jet was forced to stop all operations eventually.
"Looking ahead, it is difficult not to be bullish about the future," Chief Executive Officer Ronojoy Dutta said in a statement.
On a post-earnings call Dutta said the shutdown at Jet increased revenue per available seat kilometre by 3%-4%. That number, a measure of the carrier's operating earnings, rose 5.9% to 3.63 rupees in January-March.
Available seat kilometres, a measure of the airline's passenger carrying capacity, is expected to rise 30% in the current fiscal year.
High fuel prices, a weak rupee and an intense competition hurt profitability in the first half of the year, Dutta said, adding there was "a sharp recovery" in the second half.
Jet's troubles have allowed IndiGo and other carriers such as SpiceJet to raise prices on some routes.
IndiGo's passenger yield, a measure of airfare, rose 12% during the quarter.
"The biggest positive here is the increase in yield, which is largely due to Jet Airways," said Paarth Gala, aviation analyst with Prabhudas Lilladher.
"Yield will be firm going forward."
CEO Dutta said Jet's grounding helped IndiGo raise fares, but it will see the boost to ticket prices ease by June.
Profit for the reported quarter rose to 5.90 billion rupees ($84.87 million) for the quarter ended March 31 compared with 1.18 billion rupees a year earlier.
Shares of the company closed at record highs, up 2.5% in a broader Mumbai market, which ended 0.7% higher.