IndiGo Q2 Loss Widens 2.6x to ₹2,582 Crore Despite 9% Revenue Growth as Costs Surge
India’s largest airline, IndiGo, reported a sharp widening of its fiscal second-quarter loss as higher foreign exchange and operating expenses outweighed revenue gains.
InterGlobe Aviation Ltd, the parent company of IndiGo, reported a net loss of ₹2,582 crore for Q2 FY26, more than two-and-a-half times higher than the loss of ₹986.7 crore a year earlier. The sharp decline in profitability was primarily attributed to elevated operating expenses and a massive foreign exchange loss linked to dollar-denominated liabilities.
However, when adjusted for the forex impact, IndiGo’s performance was notably better — the airline posted a net profit of ₹104 crore, compared to a loss of ₹754 crore in the same quarter last year.
“We achieved 10% revenue growth and operational profitability excluding forex impact,” said Pieter Elbers, CEO of IndiGo. “We saw stabilisation in July and a strong recovery through August and September, providing momentum for the remainder of FY26.”
Revenue up 9%, driven by passenger growth and strong yields
During the July–September quarter, IndiGo’s revenue from operations rose 9.3% year-on-year to ₹18,555.3 crore, supported by sustained passenger traffic and improved yields. Total income grew 10.4% to ₹19,599.5 crore, reflecting the airline’s ability to maintain growth amid rising costs.
Passenger numbers increased 3.6% year-on-year to 28.8 million, while capacity (Available Seat Kilometres or ASKs) expanded 7.8% during the quarter. The load factor—a measure of how efficiently capacity is utilised—remained stable at 82.5%.
Meanwhile, yield per passenger rose 3.2% to ₹4.69, indicating better revenue per seat despite competitive market conditions.
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Expenses surge 18%, led by forex losses and higher operating costs
IndiGo’s total expenses climbed 18.3% year-on-year to ₹22,081.2 crore, primarily due to foreign exchange losses and an increase in non-fuel operating costs.
The airline booked a foreign exchange loss of ₹2,892 crore, nearly 12 times higher than in the same period last year, reflecting the impact of a weaker rupee and higher dollar-denominated liabilities.
Fuel costs provided some relief, declining 9.7% to ₹5,961.8 crore, but this was offset by a 33.7% surge in other costs (excluding fuel) to ₹16,119.4 crore, which included maintenance, lease rentals, and employee costs.
As a result, EBITDAR (earnings before interest, tax, depreciation, amortisation, and rent) fell sharply to ₹1,114 crore from ₹2,434 crore in Q2 FY25. However, EBITDAR excluding forex impact improved to ₹3,800 crore, with margins expanding to 20.5% from 15.7% a year earlier.
Strong operational performance and fleet expansion
Despite the challenging financial quarter, IndiGo continued to strengthen its operational footprint. The airline ended September with a fleet of 417 aircraft, operating 2,244 flights daily at peak levels.
It now serves 94 domestic and 41 international destinations, making it one of the most extensive networks among low-cost carriers in Asia.
IndiGo also maintained a strong liquidity position, closing the quarter with total cash reserves of ₹53,515 crore. Total debt, including capitalised lease liabilities, stood at ₹74,814 crore.
The airline’s management remains confident in its growth trajectory, raising its full-year FY26 capacity guidance to “early teens”, reflecting optimism in passenger demand recovery and fleet expansion plans.
Market reaction and stock performance
Ahead of the earnings announcement, InterGlobe Aviation’s stock closed 1.15% lower at ₹5,630 on Tuesday. Despite the short-term dip, the stock has delivered a strong 42.1% gain over the past year, underscoring investor confidence in IndiGo’s market leadership and long-term growth prospects.
Analysts noted that while forex volatility and rising operational expenses remain short-term challenges, IndiGo’s resilient demand trends, capacity expansion, and strong balance sheet position it well for sustained profitability in FY26 and beyond.
Outlook: Focus on cost efficiency and global expansion
IndiGo’s management remains focused on cost optimisation, network expansion, and international growth. The carrier plans to strengthen its presence in key global markets, including West Asia, Southeast Asia, and Europe, as part of its broader long-haul connectivity strategy.
With domestic air traffic steadily improving and fuel prices showing moderation, analysts believe IndiGo’s financial performance may stabilise in the coming quarters. However, currency fluctuations and maintenance cost pressures could continue to influence quarterly earnings.
“Despite near-term headwinds, IndiGo remains well-positioned to capture the next phase of aviation growth, supported by robust demand and operational discipline,” an aviation industry analyst said.
