IndiGo
The Delhi-based low-cost airline, IndiGo, is seeing fluctuations in the Indian Rupee against foreign currencies, hitting its financials hard. IndiGo reported a net loss of Rs 25.82 billion on account of the impact of currency movements on dollar-denominated future obligations for the quarter ended September 30 this year. Future dollar obligations include lease payments.
If the impact of currency movements were not taken into account, the Delhi-based airline would have reported a net profit of Rs 1.039 billion for 2Q25, compared with a net loss of Rs 7.539 billion during the same period last year.
“We will continue to evaluate our hedging. We did not start that long back,” said Pieter Elbers, Chief Executive Officer, IndiGo, in response to a question from AirInsight in a telephonic interaction with journalists shortly after the results were announced. AirInsight had been invited for the online interaction.
He added that the airline has a two-way strategy, which includes currency hedging and increasing the natural hedge by adding more international flights where revenue is either Euro- or dollar-based. “If we look at flights to Manchester, Amsterdam, among others, all have a significant European currency element that will help cushion some of these things,” he said, adding that for IndiGo, this was a new trajectory, so it continued hedging on currency and getting more revenues in foreign currency.
Meanwhile, the airline’s total revenue stood at Rs 196 billion, which Elbers said represented about 10 percent year-over-year growth. “Clearly, given that this is a seasonally weaker quarter, I am pleased with the 10 percent topline revenue growth in the quarter,” the CEO said. He added that the revenue was a little short of Rs 200 billion at Rs 196 billion.
During the latest quarter, the airline reported that capacity increased by 7.8 percent to 41.2 billion, while passengers flown increased by 3.6 percent to 28.8 million. Similarly, yield increased by 3.2 percent to Rs 4.69, although the load factor was flat at 82.5 percent.
“A strong recovery through August and September. Looking ahead, we have scaled up our operational plans for the second half to meet demand and continue driving growth. With that we have nudged up our capacity guidance for full financial year 2026 to early teens growth,” the CEO said.
Stretch is being introduced on more foreign routes
During the media interaction, the CEO said that the response to Stretch has been good and will soon be introduced on the India Phuket route also. At the moment, the airline offers Stretch, its version of business class, on several international routes, including Bangkok and Dubai. Stretch was first introduced in the domestic sector in November last year before it was launched on the Delhi-Bangkok route as the first international route.
P&W Engine woes
Elbers said that the grounded aircraft in the airline’s fleet were not affecting the forex. “We have seen a significant decrease of grounded planes. The planes grounded today are the P&W aircraft. Some quarters back we were in the 70s (percent) now we are in the 40s (percent). We see a stable situation,” the CEO said. Elbers added that all the new planes coming in are LEAP-powered, with CFM engines. He said the airline is not happy with the aircraft on the ground, but the number of P&W engines in IndiGo’s fleet is reducing every day.
He added that the airline is back to the 2,300 daily flights it operated earlier.
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