IndiGo posts Rs 1 879.1 cr Q2 loss on fuel costs rupee fall

     New Delhi, Oct 29 (PTI) The country's largest airline IndiGo on Thursday reported narrowing its loss to Rs 1,879.1 crore in the September quarter as increased fuel costs and rupee depreciation roiled profitability, with CEO Willie Walsh asserting that the carrier has a lot of options to deal with higher operating expenses.

     The airline, which had a loss of Rs 2,582.1 crore in the 2025 September quarter, will remain focused on short-haul operations and exercise a prudent approach on capacity amid the overall challenges in the industry.

     Briefing the media for the first time after taking charge as the CEO in August wherein he discussed the latest quarterly performance, Walsh also indicated that airfares are likely to remain elevated due to the steep rise in fuel prices.

     In the second quarter of the current fiscal year, the total income of InterGlobe Aviation, the parent of IndiGo, rose to Rs 24,311.9 crore from Rs 19,599.5 crore in the year-ago period, according to a regulatory filing.

     However, total expenses in the latest September quarter surged to Rs 26,188.4 crore, with aircraft fuel expenses surging 67.2 per cent to Rs 9,966.8 crore.

     "We responded with prudent capacity reduction and yield management, supporting strong revenue performance but only partially offsetting the higher costs. Despite these actions, the quarter resulted in a net loss of around 19 billion rupees," Walsh said in a release about the September quarter performance.

     The airline said exceptionally high fuel costs and rupee depreciation weighed on profitability besides continued geopolitical turmoil.

     In the 2026 September quarter, capacity was reduced by 1 per cent to 40.8 billion ASKs (Available Seat Kilometres) while the number of passengers flown decreased by 4.7 per cent to 27.5 million.

     For the December quarter, IndiGo said the capacity in terms of ASKs is expected to grow by early single digits as compared to the year-ago period.

     The airline's net loss, excluding forex, amounted to Rs 723.7 crore whereas it was a net profit, excluding forex, of Rs 103.9 crore in the year-ago period.

     "For the quarter, our passenger ticket revenues were Rs 206,522 million, an increase of 29.3 per cent, and ancillary revenues were Rs 24,809 million, an increase of 15.9 per cent compared to the same period last year," the release said.

     In the September quarter, the airline's yield increased by 34.3 per cent to Rs 6.30. Generally, yield refers to average revenue earned by an airline for each passenger.

     The airline has a very efficient cost base and strong liquidity that provides it a lot of options to deal with higher operating expenses, Walsh said.

     "We have very strong liquidity, and that gives us a lot of options that many of our competitors won't have available to them," he added.

     Amid rising air ticket prices, Walsh stressed that the critical issue is to balance the fares against the load factor.

     "Airlines have a number of levers that we can pull. We can focus on yield, we can focus on load factor, but in effect the critical issue is to focus on the combination of those two to maximise the revenue that we can generate," he said.

     "Obviously, we want to try and minimise the increase in fares that we are encountering. It has always been the case that India stimulates a lot of additional growth through the low fare that IndiGo has been able to offer in the market.

     "But we have no choice but to look to increase fares in an effort to offset the very significant increase that we have seen in the fuel bill," Walsh said during the virtual briefing.

     IndiGo and other carriers are also levying fuel surcharges on tickets.

     "I think we're looking at a period of elevated fuel costs for some time to come. So we'll keep all of the measures that we've taken under review and take responsible and prudent action," Walsh said.

     At the same time, Walsh, also a global airlines industry veteran, noted that the industry adapts to fuel prices and geopolitical developments.

     IndiGo, which has a strong domestic network, is relatively going slow on international expansion with wide-body planes as it has stopped the lease of Boeing 787s and will wait for its A350 aircraft to start wide-body operations.

     "We are not going to make that mistake," Walsh said, as he asserted that there was no need to compromise on the short-haul model to facilitate the move into the long-haul model.

     The outlook for India is very strong, and the long-term opportunities are significant, he said and added, "we are absolutely laser-focused on short-haul low-cost operations..."

     On whether IndiGo would participate in the government's fuel stabilisation fund initiative, the IndiGo chief said there are ongoing dialogues with the government, and if appropriate, the airline could participate in the initiative going forward.

     During the analysts call, to a query on airports owning stakes in airlines, the IndiGo CEO said there is a clear conflict of interest in terms of the airline and slot distribution.

     "... this is a brutally contested industry. We have got a lot of experienced airline people running airlines that are very efficient but are not making money...," he said and suggested that airports can look at reducing costs.

     As of September 30, IndiGo "had a total cash balance of INR 526,854 million comprising Rs 399,290 million of free cash and Rs 127,564 million of restricted cash," the release said.

     "India's long-term aviation opportunity remains compelling, and our priorities remain clear: safe and reliable operations, rigorous cost discipline, and disciplined growth that creates sustainable value," Walsh said.

(This story has not been edited by THE WEEK and is auto-generated from PTI)