IndiGo to take off only after Q2

InterGlobe Aviation Ltd, which runs IndiGo airlines, has had a wobbly start to FY26. The June quarter (Q1FY26) began on a strong note but was soon marred by external headwinds, including geopolitical tensions, airport closures, conflict in West Asia and the tragic Air India 171 crash. This triggered caution among travellers and led to increased cancellations.

- Harsha Jethmalani

Cost efficiencies offered some cushion. IndiGo's fuel costs declined in Q1, benefiting from lower crude prices, reduced deployment of fuel-inefficient damp-leased aircraft and pricing negotiations with oil marketing companies. Cost per available seat kilometre (Cask) fell about 7% year-on-year. IndiGo's passenger volume growth of 12% surpassed the industry average of 6%.

Yet, yield, a pricing measure, fell at a more-than-expected rate of 5% year-on-year to 4.98. Weak demand and dull yields led to a 1% drop in Ebitdar to 5,739 crore. Earnings before interest, taxes, depreciation, amortization, and lease rentals (Ebitdar) is a key profitability metric for airlines.

Airline capacity, measured by available seat kilometres (ASK), rose 16.4% year-on-year, in line with the guidance. IndiGo retained its double-digit ASK growth target for FY26.