Weaker rupee drives loss but core business remains robust
On the surface, IndiGo’s FY26 results saw a substantial deterioration compared to the prior year. The airline swung from a net profit of ₹75,934 million ($799 million) in FY25 to a net loss of ₹23,936 million ($252 million) in FY26.
Two factors accounted for most of that swing:
- Foreign exchange losses increased by ₹73,578 million ($774 million), driven by a 10% depreciation in the rupee against the dollar.
- The airline recognized ₹17,964 million ($189 million) in exceptional expenses: two-thirds related to new labour legislation and one-third to operational disruption in early December.
The underlying business is, however, considerably healthier.
Stripping out foreign exchange losses, one-off expenses, finance costs and inventory movements, operating profit came in at ₹147,010 million ($1.55 billion) on a 16% operating margin. This is slightly below FY25's 17% operating margin but still a strong result by global airline standards.
This ultimately reflects IndiGo’s #1 position in the world’s third-largest domestic market and the continued challenges facing its main rival, Air India.
Encouraging revenue outlook for the June quarter
In IndiGo’s earnings call, management struck a positive tone for the June quarter, expecting “mid-teen improvement” in PRASK (passenger revenue per ASK), noting that “for the moment…the market is inelastic to these hikes in fares”.
This improvement is, however, off a relatively low base. Last year’s June quarter saw a 10% year-on-year (YoY) decline in RASK off the back of the Pahalgam terror attack, airspace restrictions over Pakistan, and subdued travel demand following the AI117 incident.
IndiGo’s fleet continues to grow
IndiGo ended FY26 with 441 aircraft, up from 434 a year earlier. Several key points stood out:
- Over 40 Pratt & Whitney GTF-powered aircraft remain grounded. The airline expects this number to fall below 40 by year-end.
- Aircraft ownership has grown significantly. 36 aircraft are now owned unencumbered, up from 8 at the end of FY25.
- IndiGo inducted its first A321XLR earlier this year. The type now serves Athens and Istanbul from Delhi and Mumbai.
- Managing Director Rahul Bhatia reiterated that the A320 family remains central to the airline’s future despite the outstanding order for A350 widebodies due for delivery starting next year.
A global leader in unit cost
IndiGo’s ex-fuel ex-FX CASK came in at ₹3.00, equivalent to around 3.2 USD cents or 2.7 EUR cents.
This is among the lowest of any airline globally and continues to form the foundation of the business.
The Engine Cowl
