InterGlobe Aviation Q1 FY27: Net Loss of ₹2.4 Billion on Higher Fuel Costs
IndiGo reported a Q1 FY27 net loss of ₹2.4 billion, a significant shift from last year's profit. Total income rose 19% to ₹256 billion, with yields up 21.3%. Elevated fuel costs, up 80% year-on-year, were a key factor. The company expects flattish capacity growth in Q2 FY27, but projects over 25% yield growth.
The reported net loss and significant increase in fuel costs directly affect the company's profitability and financial health. Guidance for flattish capacity growth in the next quarter, despite yield improvements, indicates ongoing challenges.
The company reported a net loss in the quarter, a significant decline compared to the previous year's profit, primarily driven by increased fuel costs and volatile operating conditions. While revenue saw growth, the bottom line was negatively impacted.
InterGlobe Aviation Limited (IndiGo) announced its financial results for the first quarter of fiscal year 2027, reporting a net loss of ₹2.4 billion. This contrasts with a profit of ₹21.8 billion in the same quarter last year. The company's total income grew by approximately 19% year-on-year to ₹256 billion, with passenger yields increasing by 21.3%, though load factors saw a slight reduction of 1.3%. Despite a volatile environment, passenger demand remained robust, with 31.3 million passengers served, a growth of about 1% year-on-year.
EBITDAR for the quarter stood at ₹38.3 billion, with a margin of 15.6%, down from ₹57.4 billion and a margin of 28% in the prior year's quarter. Excluding currency movements, the net loss was around ₹56 million. Capacity deployment for the quarter grew by 3% year-on-year, influenced by geopolitical developments and a transition into a seasonally weaker period. Pricing actions were implemented to offset elevated costs, leading to a meaningful improvement in the revenue environment.
The primary driver of cost pressure was fuel, with benchmark Singapore jet fuel prices increasing by nearly 120% year-on-year due to elevated crack spreads and global developments. Despite government intervention and support from oil marketing companies to moderate domestic ATF prices, the company's fuel CASK (Cost per Available Seat Kilometer) increased by approximately 80% year-on-year. CASK ex-fuel and ex-forex also rose by about 11% year-on-year due to currency depreciation, lower utilization, and annual contractual escalations.
IndiGo inducted 13 aircraft and redelivered 9 aircraft, resulting in a total fleet of 432 aircraft. The airline commenced flights to Jamnagar and became the first to operate from Jewar airport in Noida. New initiatives include "Lite Fare" for passengers without check-in baggage and the "IndiGo BluChip" loyalty program enhancements. The company also tested SITA's OptiClimb AI solution for fuel efficiency.
Looking ahead to Q2 FY27, IndiGo expects flattish capacity growth year-on-year due to a prudent approach to capacity rationalization and temporary international suspensions. However, unit passenger revenue (PRASK) is projected to grow by more than 25% year-on-year, supported by a balanced demand-supply equation and sustained higher fares.
The company ended the quarter with total cash of ₹529 billion, including ₹390 billion in free cash. Management emphasized a disciplined approach to managing the business, balancing growth with economics, capacity with demand, and near-term volatility with long-term strategic priorities, focusing on reliability, cost efficiency, balance sheet strength, and shareholder value.
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