IndiGo slips into Q1 loss as fuel costs, West Asia disruptions weigh on earnings

Elevated aviation turbine fuel (ATF) prices, network-related constraints arising from the conflict in West Asia and adverse foreign exchange movements pushed InterGlobe Aviation, parent of airline major IndiGo, into a consolidated net loss of ₹238 crore during the first quarter of FY27 ended June 30, 2026, against a net profit of ₹2,176 crore in the corresponding period last year.

Despite the loss, the country’s largest airline reported strong revenue growth, supported by improved passenger yields and sustained travel demand.

Accordingly, revenue from operations increased 19.9 per cent year-on-year to ₹24,584 crore, while total income rose 18.9 per cent to ₹25,614 crore.

Besides, passenger ticket revenue grew 23 per cent to ₹21,879 crore, while ancillary revenue increased 13.9 per cent to ₹2,453 crore during the quarter.

Meanwhile, airline carried 31.3 million passengers, up 0.7 per cent from a year earlier, while capacity measured in Available Seat Kilometres (ASKs) increased 2.9 per cent to 43.5 billion.

However, passenger load factor declined 1.3 percentage points to 83.3 per cent, although passenger yield improved 21.3 per cent to ₹6.04 per kilometre.

According to IndiGo’s Managing Director Rahul Bhatia, the quarter was characterised by an exceptionally challenging operating environment.

“The first quarter was shaped by a volatile operating environment, with elevated fuel costs and network-related constraints in the Middle East impacting profitability. At the same time, demand remained healthy and our revenue performance improved year-on-year, supported by improved yields and continued customer preference for IndiGo as we proudly served more than 31 million passengers,” Bhatia said.

He added that the airline remained focused on prudent capacity management, cost discipline and responding to changing market conditions.

“However, the pressure of fuel costs and rupee depreciation resulted in a loss of around 2 billion rupees for the quarter. While near-term uncertainties remain, we continue to stay committed to our long-term priorities of strengthening the network, enhancing customer choice, and creating sustainable value for all stakeholders,” he said.

Furthermore, the airline’s Chief Financial Officer Gaurav Negi said the airline’s revenue performance remained resilient despite a difficult operating backdrop.

“The quarter witnessed strong revenue growth with passenger unit revenue increasing by about 19 per cent year-on-year. However, a combination of fuel price escalation, adverse foreign exchange movement and the Middle East conflict impacted profitability during the quarter,” Negi said during the post-results earnings call.

Notably, fuel costs remained the biggest drag on earnings during the quarter. Fuel expenses surged 85.7 per cent year-on-year to ₹10,833 crore, resulting in total operating expenses increasing 34.4 per cent to ₹25,853 crore.

Besides, earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) declined 33.2 per cent to ₹3,833 crore, with EBITDAR margin contracting to 15.6 per cent from 28.0 per cent a year earlier.

As of June 30, IndiGo had a total cash balance of ₹52,885 crore, including ₹39,039 crore of free cash. Total debt, including capitalised operating lease liabilities, stood at ₹81,531 crore.

The airline operated a fleet of 432 aircraft at the end of the quarter, including three Airbus A321XLR aircraft, six damp-leased Boeing 787 aircraft, 176 Airbus A321neo aircraft and 44 ATR aircraft. It served 97 domestic and 46 international destinations while operating at a peak of 2,298 daily flights during the quarter.

Looking ahead, Negi said capacity in the second quarter of FY27 is expected to remain broadly flat compared with the corresponding period last year, reflecting seasonally weaker demand and continuing operational uncertainty affecting travel between India and West Asia.

He added that aircraft utilisation is expected to progressively improve beyond the c...