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Informist, Monday, Mar. 16, 2026

NEW DELHI – West Asia is the largest international destination for InterGlobe Aviation Ltd.-operated IndiGo, however, the airline's exposure to the effects of the conflict in the region will be mitigated by its leading position in the domestic market, Moody's Ratings said in a report Friday. India, where IndiGo commands a 64% market share, accounts for 75% of the airline's revenue while the West Asia market contributes 18%, as per the report.

The airline carrier has limited exposure to the conflict's immediate effects such as fleet groundings and flight cancellations but will face near-term pressure from increased fuel cost, longer flight times on account of rerouting, and ongoing exposure to foreign exchange volatility from the depreciation of the rupee, the report said. It added that according to the company estimates, every $1 uptick in jet fuel prices will result in higher expenses of about INR 200 million-INR 250 million, or $2.2 million–$2.7 million, per month for the airline based on its current usage.

Moody's Ratings said IndiGo is exposed to higher fuel prices and does not hedge, however, the airline's shorter booking curve of about 30-45 days will likely allow it to pass through higher costs to customers over the medium term. The credit rating agency added that IndiGo has restarted European services using alternative routes, although with limited success, and retains the ability to redeploy aircraft domestically or to Southeast Asia over the medium term, limiting operational and revenue disruption. 

GLOBAL IMPACT

According to the report, the conflict in West Asia will compress profitability of airlines globally as fuel costs, which is their second-largest expense item, remain high and operational disruptions continue. The impact will, however, vary depending on the hedging practices followed by the airlines. For instance, European airlines typically hedge at least 50% of their fuel needs while most US airlines have done away with the practice and Latin American airlines usually hedge about 10-25% of their forward 12-month fuel needs, as per the report.

"...We expect higher jet fuel prices globally to weigh on airline profitability, even for some airlines with hedges, particularly as fares are paid in advance," the credit rating agency said. Between US airlines, low-cost-carriers and ultra-low cost carriers, which are already facing margin compression from higher labour and maintenance expenses, will be most adversely affected by higher energy costs, it added. End

US$1 = INR 92.41

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Shakshi Jain

Edited by Akul Nishant Akhoury

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