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Informist, Friday, May 29, 2026

By Rajesh Gajra and Ashutosh Pati

MUMBAI – InterGlobe Aviation Ltd., which operates IndiGo, has largely offset the increase in domestic fuel prices by raising airfares, the company's management said Friday during a post-earnings conference call with investors and analysts. The war in West Asia had severely disrupted international flight operations and sharply increased aviation fuel prices.

InterGlobe has not been able to completely offset the increased fuel costs with fare increases, though, a top official said. In its domestic operations, the Indigo has managed to recover "to a large part" the increased fuel costs from changes in flight fares mainly because of the softer price hikes taken by domestic oil marketing companies, according to the management.

But on its international routes, the airline has not been able to fully pass on the increase in fuel costs to passengers in the form of fare hikes, since aviation fuel prices continue "to be on a much higher kind of scale at market prices," a top official said. 

Interglobe aims to further increase Indigo's fares on its international flights. The airline had cancelled about 160 international flights across West Asia and Europe routes when the war began on Feb. 28. "But today that capacity is probably back to two-thirds of what we were," a top official said.

"It is very clear that we need to take fares up to protect ourselves against some of these additional costs that are showing up. And for the moment, what we are discovering is that fares are sticking. The demand is there. So you obviously have to take the pricing up to the point where you start to see (demand) elasticity come in," InterGlobe's Managing Director Rahul Bhatia said, answering a question whether there would be a demand disruption in domestic and international routes due to increased fares. 

The spike in fuel prices from March onwards materially affected the company's operating economics across markets, with international flights impacted in both West Asia and Europe, according to management. Indigo, like its peers around the world, had to take short-term measures to protect operational viability, the management said.

The hit from the West Asia situation followed immediately after the December quarter fiasco, which led to massive domestic flight cancellations by IndiGo in December, as the airline failed to comply with the Directorate General of Civil Aviation's deadline on flight duty time limitations for pilots. "Not only did the December disruption cause a significant impact on our results, but what transpired fell short of the standards we set for ourselves when we began this journey in 2006," Bhatia said. "Our customers deserve better," he said.

Regarding wet lease arrangements, management said the company is aiming to phase them out because they tend to be more expensive, both in upfront cost and in the inherent markup. Of the total fleet of 441 aircraft the airlines had on Mar. 31, 20 were on wet lease arrangements, down from 27 wet leases a year ago but up from 16 at the end of the December quarter.

There was a 2.5% sequential decline in InterGlobe's employee expenses for the March quarter to INR 18.30 billion. The management said this was due to reversals of accruals related to leadership payouts.

Regarding the grounding of over 40 aircraft with Pratt & Whitney engines, in which quality defects were detected, the management said it expected the number of grounded aircraft to trend down "to the 30s" by the end of the year. "At this point, we do not have further guidance from the OEMs (original equipment manufacturers) beyond this point," a top official said.

InterGlobe reported a loss of INR 26.62 billion for the March quarter, against a net profit of INR 30.73 billion a year ago. The company's net loss was largely due to a foreign exchange loss of INR 48 billion and an expense of INR 2.5 billion towards the impact of the new labour codes. The company's revenue from operations for the March quarter grew 1% on year to INR 224.38 billion.

On Friday, shares of InterGlobe closed 3.6% lower at INR 4,405 on the National Stock Exchange.  End

Edited by Saji George Titus

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