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Indian airline IndiGo reports quarterly loss due to capacity restrictions and declining rupee

IndiGo, India's budget airline, reported a loss for the fourth quarter?on Friday. The country's leading airline was struggling with a deteriorating rupee and soaring fuel costs.

The airline reported a loss for the quarter ending March 31 of 26.62 billion rupies ($280.2m), compared to a profit of 30,73 billion rupies in?the previous period.

The airline was forced to reduce its domestic capacity in the third quarter by 10% after being ordered to do so by the aviation regulator of the country. This followed a series of mass cancellations that occurred during December, which led to the worst aviation crisis of the country and the sudden departure of the CEO.

The revenue for the quarter grew by 1.3%. However, expenses increased at a faster rate, nearly 31%.

IndiGo spends over 60% of its costs in dollars, directly or indirectly. A depreciating currency has also increased the overall cost for the company.

IndiGo's forex loss was 48.82 billion rupees in the third quarter. This compares to a gain of 1.38 billion rupees a year ago.

The airline's margins were also affected by the rising fuel prices as a result of supply restrictions following the war in Iran.

IndiGo and other airlines that do not hedge their fuel have been struggling with the soaring prices of jet fuel as the Iran War pushed crude oil to over $100 per barrel. ($1 = 95.0000 Indian Rupees) (Reporting and editing by Nivedita Battacharjee in Bengaluru)

(source: Reuters)