Mumbai: Over a fifth of IndiGo’s fleet is now either owned or held under finance leases, up from about 10% at the end of September 2024 when the airline first outlined plans to increase ownership. Analysts say the move will help cushion the carrier against rupee depreciation, which inflates lease payments that are typically denominated in US dollars.
This suggests that India’s largest airline has already achieved around half of its 2030 target, where it aims to increase the share of owned and finance-leased aircraft to 30-40%, as outlined earlier by former CEO Pieter Elbers in post-earnings interaction on 4 November 2025. The finance leases also help IndiGo own the aircraft.
, which went public in November 2015, had been considering increasing fleet ownership for years but made substantial headway only starting in September 2024.
As of September 2024, IndiGo had three owned aircraft, while 37 were under finance leases, together accounting for roughly 10% of the 410 fleet. This doubled by March 2026, with owned planes rising to 36 and those under finance leases increasing to 53, taking their combined share to about 20% of the 441 fleet.
“While 36 owned aircraft matches the entire fleet scale of younger players like for a carrier like IndiGo, whose operational fleet exceeds 440 aircraft, this represents only about 8% of total capacity,” said Karan Khanna, lead analyst for hotels, real estate, aviation and small & mid-caps at Ambit Capital.
That number will continue to rise as IndiGo transitions from a strictly asset-light, sale-and-leaseback model, Khanna said.
“The shift toward owning aircraft acts as an effective operational and financial buffer against rupee depreciation. Because standard operating leases are heavily dollar-denominated, an unhedged airline faces constantly escalating rupee expenses for lease rentals every time the domestic currency dips,” Ambit’s Khanna said.
In November 2025, IndiGo announced an $820 million investment in its GIFT City unit to acquire aviation assets.
Last month, it approved up to $450 million ( ₹4,340 crore) to prepay finance lease obligations to its GIFT City subsidiary, InterGlobe Aviation Financial Services IFSC Pvt Ltd. The unit will use these funds to buy aircraft, engines, and spares, boosting fleet ownership.
Buying planes outright is also supported by initiatives like their captive leasing unit where companies can secure lower-cost financing. Also, in the longer term, owning is better than leasing, Khanna said.
This also marks a shift from IndiGo’s long-standing sale-and-leaseback model, the backbone of its financial success and market dominance for nearly two decades. Under this approach, the airline would place large aircraft orders at competitive prices, sell the planes to lessors upon delivery, and lease them back, booking gains that were reinvested into fleet expansion.
Between 1 June 2025 and 31 March 2026, the rupee depreciated by 13.64%. By owning more aircraft, or for now 8% of its total fleet, IndiGo is now trying another way to hedge against currency swings. This complements its stepped-up financial hedging strategy, with the airline increasing its currency hedge target from $1 billion to $3 billion, including $2 billion of exposure covered over a two-five year term.
“The aircraft ownership strategy of InterGlobe Aviation (IndiGo) through its unit in GIFT City is not exactly a natural hedge against currency swings, but it’s a structural way to reduce and manage forex exposure. Instead of depending heavily on foreign lessors, IndiGo is bringing part of the leasing in-house and borrowing in dollars at better rates,” said Jainam Shah, aviation analyst at Equirus Securities.
This helps it avoid sudden increases in lease costs when the rupee weakens and gives it more control over how it manages dollar expenses. However, since most of its ticket revenue is still in rupees while many costs are in dollars, the currency risk does not go away completely, it is just better managed, Shah said.
To be sure, it is through the finance leases that IndiGo comes to own the aircraft. “The benefit of a finance lease is that you have an option to buy out the aircraft at the end of the lease term. In an operating lease, you are basically returning an asset,” Gaurav Negi, chief financial officer, told analysts during an interaction with analysts post Q1FY26 results.
“We are shifting now (from the operating lease) that we will start owning aircraft and the finance lease approach is the first step towards that,” Negi said.
IndiGo posted a loss in at least three of the last seven quarters, two of which were largely driven by currency volatility, despite otherwise steady operational performance. With a significant portion of its lease liabilities denominated in dollars, a weakening rupee has consistently weighed on profitability.
Hidden opportunity
As IndiGo boosts its efforts to hedge its forex exposure, in the near term, it may see cost pressures but also an opportunity to gain market share.
“Amid elevated cost pressures in 1Q, the Co expects mid-teens unit revenue growth (pricing-led), with initial demand inelasticity enabling some cost pass-through. The near-term performance would remain muted, with conditions even tougher for peers,” wrote Jefferies analysts Prateek Kumar and Raghav Malik in their note dated 29 May.
According to Elara Securities in the summer schedule 2026, domestic departures for the industry may fall 6% year-on-year in the next two quarters.
“Capacity cuts by competitors are higher than INDIGO’ s, creating scope for the company to gain share and preserve pricing power,” wrote Gagan Dixit, aviation analyst at Elara Securities in his report dated 30 May.
As of April, IndiGo has a market share of 65%, up from 63.3% in March, while its peer Air India Group saw its market share decline to 24.7% in April from 26.2% in March, according to the Directorate General of Civil Aviation.