News ArticleIndiGo Reports Q2 FY2027 Net Loss of ₹19 Billion Amid High Fuel Costs and Seasonally Soft Demand
Total income rises 24% to ₹243 billion with strong revenue growth offset by cost pressures; liquidity remains robust at ₹399 billion
IndiGo announced a net loss of ₹19 billion in Q2 FY2027 due to high fuel expenses and softer seasonal demand. The airline's total income grew 24% year-over-year to ₹243 billion, with a 31% increase in PRASK, but elevated costs impacted profitability. IndiGo maintains strong liquidity with ₹399 billion in free cash and plans measured growth focusing on long-term value amid challenging global conditions.
InterGlobe Aviation Limited
Earnings Call Transcript
IndiGo posted a net loss of ₹19 billion for the second quarter of fiscal year 2027, primarily due to significantly elevated jet fuel costs and a seasonally weak demand period. Despite these challenges, the airline achieved a 24% increase in total income to ₹243 billion and improved revenue metrics through capacity management and pricing actions.
IndiGo faced a difficult operating environment in Q2 FY2027, influenced by geopolitical uncertainties, elevated global fuel prices, and the monsoon season leading to lower passenger traffic. The company responded by rationalizing capacity, reducing seat deployment industry-wide by about 5%.
PRASK (Passenger Revenue per Available Seat Kilometer) increased 31%, surpassing the company’s guidance of over 25%, supported by disciplined pricing and a strengthened ancillary revenue stream including cargo business growth of 37% year-over-year.
Operating costs surged mainly due to fuel expenses, with a 60% increase in the Singapore jet fuel benchmark compared to Q2 last year, compounded by a 9% depreciation of the Indian rupee. This drove a 69% rise in fuel Cost per Available Seat Kilometer (CASK).
The company’s EBITDAR was ₹25 billion with an 11% margin, improving from ₹11 billion and 6% margin in the previous year’s quarter. However, on a like-for-like basis excluding mark-to-market and hedging impacts, the EBITDAR margin declined due to elevated costs.
IndiGo’s liquidity remains strong, holding free cash of approximately ₹399 billion, affording flexibility amid short-term volatility. The airline continues to focus on cost discipline, operation efficiency, measured international expansion leveraging new aircraft, and strengthening customer loyalty through its BluChip program approaching 20 million members.
Highlights
- Net loss of ₹19 billion in Q2 FY2027, improved from loss of ₹26 billion in prior year quarter.
- Total income increased 24% year-over-year to ₹243 billion.
- Passenger Revenue per Available Seat Kilometer (PRASK) rose 31%, exceeding company guidance.
- Industry seat deployment down 5% year-over-year during seasonally soft quarter.
- Fuel costs were 60% higher than previous year due to global fuel prices and currency depreciation.
- EBITDAR of ₹25 billion with 11% margin, but like-for-like margin declined 5 percentage points excluding mark-to-market effects and hedging impact, driven by cost escalations and fuel prices.
Key Data Snapshot
What happened
- IndiGo reported a net loss of ₹19 billion for Q2 FY2027 driven by exceptionally high fuel costs and a seasonally soft period between travel peaks.
- Total income grew 24% year-on-year, reaching ₹243 billion, supported by disciplined pricing and capacity rationalization.
- Passenger Revenue per Available Seat Kilometer (PRASK) increased 31%, outperforming company guidance despite tougher operating conditions.
- Industry-wide seat capacity was reduced by approximately 5% year-over-year during this period.
- The airline’s liquidity remains strong with free cash of around ₹399 billion, providing financial stability amid market volatility.
Key details
- Fuel costs were 60% higher than Q2 FY2026 benchmark prices, compounded by a 9% depreciation of the Indian rupee, leading to a 69% increase in fuel cost per available seat kilometer (CASK).
- EBITDAR rose to ₹25 billion with an 11% margin compared to ₹11 billion and a 6% margin in the same period last year; adjustments excluding mark-to-market and hedging impacts show a margin decline attributed to elevated costs.
- Passenger load factor declined by 2 percentage points despite increased yields by over 34%.
- Ancillary revenues expanded through enhanced customer offerings and digital access; cargo revenue grew 37% year-over-year.
- Management emphasized maintaining strong cost control, measured growth in international markets, and strengthening the BluChip loyalty program nearing 20 million members.
Highlights
- Net loss of ₹19 billion in Q2 FY2027, improved from loss of ₹26 billion in prior year quarter.
- Total income increased 24% year-over-year to ₹243 billion.
- Passenger Revenue per Available Seat Kilometer (PRASK) rose 31%, exceeding company guidance.
- Industry seat deployment down 5% year-over-year during seasonally soft quarter.
- Fuel costs were 60% higher than previous year due to global fuel prices and currency depreciation.
- EBITDAR of ₹25 billion with 11% margin, but like-for-like margin declined 5 percentage points excluding mark-to-market effects and hedging impact, driven by cost escalations and fuel prices.
Disclosures
- SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
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