IndiGo Reports FY26 Loss Amid Rupee's Decline

IndiGo Reports First Loss in FY26 Due to Rupee Depreciation and Weak Demand

India's largest airline, InterGlobe Enterprises Ltd, reported a loss of ₹2,393.6 crore in the year ended March, compared to a profit of ₹7,258 crore in the previous year. This marks the first loss for IndiGo after it reported a loss in FY23. The company attributed the losses to the 11% depreciation of the rupee against the dollar.

As a significant portion of IndiGo's leased liabilities are dollar-denominated, a falling rupee hurts the airline's profitability. The financial pain extended beyond forex with IndiGo's capacity expanding 9.5% even as passenger traffic grew just 7.5%, pushing load factors down to 84.4% from 86% a year earlier. Revenue per available seat kilometre (RASK), a vital metric for understanding pricing power, fell 3% to ₹4.99, indicating that the airline was flying more seats at lower fares into less demand.

IndiGo's peers are facing similar problems. Air India is expected to post a nearly $3 billion loss for the same period, as the sector grapples with the West Asia war's impact on fuel prices, Pakistani airspace closures, and India's weakest passenger growth since the covid pandemic.

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IndiGo's revenue from operations improved 5% to ₹84,962 crore for 2026. During the January-March period, revenue improved 1.3% to ₹22,438.4 crore while the airline reported a loss of ₹2,536.9 crore. "Despite these conditions, the underlying performance of the business remained resilient. Excluding the impact of foreign exchange and exceptional items, IndiGo delivered a profit of ₹7,500 crore," the company said.

Rahul Bhatia, founder and managing director, IndiGo, said, "FY26 was marked by an exceptionally challenging operating environment, which materially impacted our profitability." Bhatia took over as the carrier's chief executive after Pieter Elbers' abrupt departure in March. Former British Airways CEO Willie Walsh joins the carrier from August 3.

IndiGo will undertake a 'selective recalibration' of domestic routes in the seasonally weaker July-September quarter, deploying fewer aircraft. The airline will also reduce fleet count by returning or retiring less fuel-efficient aircraft.

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"IndiGo reported a weaker-than-expected margin performance, primarily due to higher forex losses, driven by rupee depreciation," said Jainam Shah, aviation analyst at brokerage Equirus Securities. "Impact of elevated fuel costs arising from the West Asia crisis is likely to reflect from Q1FY27 onwards."