A sharp fall in the rupee against the dollar, along with weak demand, hurt IndiGo’s financial performance as the country’s largest airline swung to losses, a first after it reported a loss in FY23.
On Friday, InterGlobe Enterprises Ltd, which runs IndiGo, reported a ₹2,393.6 crore loss in the year ended March, compared with a ₹7,258 crore profit in the previous year. IndiGo attributed the losses to the 11% depreciation of the rupee against the dollar.
As IndiGo’s leased liabilities are dollar-denominated, a falling rupee hurts the airline’s profitability.
The financial pain extended beyond forex with 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—vital for understanding pricing power—fell 3% to ₹4.99, indicating that the airline was flying more seats at lower fares into less demand.
“FY26 was marked by an exceptionally challenging operating environment, which materially impacted our profitability,” said Rahul Bhatia, founder and managing director, IndiGo. Bhatia took over as the carrier’s chief executive after Pieter Elbers’ abrupt departure in March. Former British Airways CEO joins the carrier from 3 August.
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.
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.”
Despite Bhatia’s upbeat commentary on the performance, operational weaknesses were evident in the financials.
For now, IndiGo has not provided full-year guidance on capacity or passenger growth, as it has in the past.
“We will give full-year available seat per kilometre guidance later this year,” , chief financial officer, said during the post results investor call.
IndiGo said it would 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.
“ 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.”