InterGlobe Aviation Limited, which operates India’s largest airline IndiGo revealed plans to invest beyond its airline operations.
Branching out
It also intends to make early investments in aviation-related companies along with acquiring assets such as aircraft and engines to make better use of its cash flows.
The airline, India’s largest, had free cash amounting to ₹15,691 crore, up 89% from the previous quarter.
Also, just recently it reported its highest-ever quarterly profit of 3,090.6 crore in the April-June 2023 quarter thanks to strong demand for air travel, lower fuel costs and favourable movement in foreign currency.
Record profits
The airline certainly has plenty of cash to burn.
It posted its highest-ever quarterly profit of Rs 3,090.6 crore in the June quarter, riding on the back of strong operational performance and positive market conditions.
“We will look at investing ₹7 crore in the venture capital business to begin with. Internal discussions are happening. This is a directional view. We haven’t decided on how much capital we want to allocate to that,” chief financial officer Gaurav Negi said.
Passenger traffic
The airline also enjoyed an increase in average daily air passenger traffic.
Average daily air passenger traffic in the Indian civil aviation market was recorded at over 424,000 air passengers, higher than the daily air passenger traffic in the pre-pandemic year of 2019.
It’s even higher than the previous quarter of the last fiscal.
Official statement
“Given our strong liquidity position, we are also planning to invest in some aircraft and related assets.
Further, subject to regulatory approvals, we are also planning on launching a venture capital arm to invest in early-stage companies operating in aviation, consumer-focused and allied sectors such as travel, lifestyle, hospitality and transportation.
Given our large consumer base, we believe these investments will help us add value to the airline,” said Negi.
Asset acquisition
The airline’s management acknowledged that its acquisition of engines and aircraft during the pandemic made little sense.
However, with progress on multiple fronts, it’s not hard to understand why it would be willing to take on such endeavors.
