IndiGo Q1 net profit drops 20.2% on geopolitical tensions, airspace restrictions
Geopolitical tensions and airspace restrictions during the April-June quarter of FY26 caused a 20.2 per cent year-on-year drop in airline major IndiGo’s net profit to ₹2,176.3 crore, from ₹2,728.8 crore reported in the same period of last year.
On Wednesday, InterGlobe Aviation, the parent company of IndiGo, stated that the decline in profitability came despite a 4.7 per cent rise in operational revenue, which stood at ₹20,496.3 crore for the quarter. Besides, the total income for the airline rose 6.4 per cent year-on-year to ₹21,542.6 crore.
Notably, the income growth occurred on the back of a 7.8 per cent increase in passenger ticket revenue, which reached ₹17,791.7 crore. Furthermore, ancillary revenues surged by 22.1 per cent to ₹2,153.4 crore.
According to IndiGo Chief Executive Pieter Elbers, the quarter was marked by “significant external challenges”, including geopolitical tensions, airspace restrictions, and a tragic accident in the Indian aviation sector.
Nonetheless, demand for air travel remained resilient, with the airline ferrying over 31 million passengers during the quarter — a 11.6 per cent increase compared to the previous year.
operational costs
However, rising operational costs eroded the company’s bottom line. Accordingly, IndiGo’s total expenses rose 10.2 per cent to ₹19,231.9 crore. While fuel costs declined 9.1 per cent to ₹5,832.6 crore, other costs excluding fuel rose sharply by 21.5 per cent to ₹13,399.3 crore.
In addition, the yield dropped by 5 per cent to ₹4.98 per kilometre, while the load factor fell 2.1 percentage points to 84.6 per cent.
The company posted an EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortisation and Rent) of ₹5,738.6 crore with a margin of 28 per cent, slightly below last year’s ₹5,811.1 crore and a 29.7 per cent margin.
In terms of financial health, IndiGo reported a strong cash position with a total balance of ₹49,405.7 crore, of which, ₹34,801.9 crore was free cash.
The airline’s total debt, including capitalised lease obligations, stood at Rs 68,488.4 crore.
As per its guidance, IndiGo expects capacity measured in Available Seat Kilometres (ASK) to grow in the mid-to-high single digits in the second quarter of FY26, indicating continued focus on network expansion and demand recovery.
Speaking during post results media call Elbers said the two wide-body aircraft leased from Turkish Airlines are still operational, with extended permits valid through August.
He also shared the delivery schedule for six additional wide-body aircraft from Norse Atlantic.
The second aircraft, Elbers said is expected by mid-September, with two more by year-end, and the remaining two in the first quarter of 2026.
These additions will support enhanced services to European destinations such as Amsterdam and Manchester, he said.
Operationally, Elbers pointed out that IndiGo has seen improvement in its grounded aircraft (AOG) count, now in the “range of the 40s”.
This, combined with reduced reliance on damp leases, has positively impacted financial efficiency.
“With fewer AOGs, we needed fewer damp leases,” said Elbers, adding that the airline has been able to meet its capacity guidance despite external pressures.
Elbers said the initial uptake of new Stretch seating was gradual; however, the product has seen improved load factors and strong customer response.
The product has since been expanded to Bangalore and Hyderabad and internationally to Bangkok as of July 1. Next it will be launched on routes to Singapore and Dubai.
Additionally, the airline plans to expand ‘Stretch’ service to other Indian cities, including Chennai and Kolkata, once international rollouts stabilise.
Flight cancellations
When asked whether recent disruptions — including the India-Pakistan airspace conflict and a crash — had impacted results, Elbers acknowledged their effect, particularly noting 170 daily flight cancellations during Operation Sindoor.
Several routes in Central Asia and West Asia were also rerouted or suspended, which weighed on financial performance.
On competition in the long-haul segment, Elbers noted: “The further you are from India, the lower the market share of Indian carriers. That’s where the opportunity lies,” he said, citing Manchester, where IndiGo is the sole Indian operator.
He also referenced to the recent UK–India trade agreement as a demand driver.
loyalty programme
Concluding the session, Elbers pointed to the success of IndiGo’s newly launched loyalty programme, which has already enrolled 3.8 million members.
All these pieces, long-haul flying, Stretch, loyalty, are coming together. Despite headwinds, we’ve shown agility and performance,” he said.
As of June 30, IndiGo operated a fleet of 416 aircraft, marking a net reduction of 18 passenger aircraft during the quarter.
The airline maintained high operational intensity, running up to 2,269 daily flights and offering scheduled services to 91 domestic and 41 international destinations.
Published on July 30, 2025
