IndiGo Cuts Its Q2 Loss to Rs 1,879 Crore, but Fuel Now Eats 43% of Revenue and the Norse Wide-Body Experiment Ends

InterGlobe Aviation, the parent of IndiGo, reported a consolidated net loss of Rs 1,879.1 crore for the July-September quarter on Thursday, October 29. That is 27.2% narrower than the Rs 2,582.1 crore it lost in the same quarter last year. Higher fares did most of the work: revenue from operations rose about 26% to roughly Rs 23,364 crore, and total income climbed 24% to Rs 24,311.9 crore.

The improvement still left India's largest airline well short of breaking even. Total expenses rose 18.6% to Rs 26,188.4 crore, and one line dominated the increase.

Fuel's share of the business has jumped

Aircraft fuel costs surged 67.2% to Rs 9,966.8 crore. The airline's finance chief, Kiran Thadimarri, told analysts that the Singapore jet fuel benchmark averaged 60% higher than a year earlier.

Put against revenue, the shift is stark. Fuel now absorbs close to 43% of IndiGo's operating revenue. Working back from the reported growth rates, the same ratio was nearer 32% a year ago. On those same figures, revenue grew by roughly Rs 4,800 crore from a year ago while the fuel bill grew by about Rs 4,000 crore. An airline that built its reputation on tight cost control has, in effect, handed more than four-fifths of its extra revenue straight to fuel suppliers.

The currency made it worse. The rupee averaged Rs 95.09 to the dollar during the quarter, against Rs 87.06 a year earlier, a fall of more than 9%. Fuel is priced in dollars, and so are aircraft leases and a large share of maintenance bills. Even stripping out fuel and currency effects, IndiGo's cost per available seat kilometre rose 14.6% to Rs 3.45.

The Norse lease is the first casualty

The clearest sign of strain is a decision to end IndiGo's wet-lease arrangement with Norse Atlantic from November 1. Under the deal, IndiGo flew wide-body Boeing 787s with Norse supplying crew and support, an early step into long-haul flying ahead of its own Airbus A350s.

Chief executive Willie Walsh called the exit an easy decision given fuel prices and geopolitical disruption. He said the airline had learned enough from the operation to help when its A350s arrive in 2028, and that IndiGo would not let its long-haul plans distract from the low-cost domestic network that funds everything else.

What management expects next

The outlook leans on pricing rather than growth. IndiGo expects revenue per available seat kilometre to rise more than 25% year on year in the October-December quarter, based on October trends, helped by festive and holiday travel. Walsh said demand had held up reasonably well despite higher fares.

Capacity, by contrast, is expected to grow only in the low single digits in the third quarter and for the full year. Non-fuel unit costs are guided to rise in the high single digits to low double digits for FY27.

Two other points stand out:

• Cash cushion: IndiGo ended the quarter with about Rs 39,929 crore of free cash, giving it room to absorb further volatility.
• Fuel relief: Walsh said the airline could join the government's proposed fuel-price stabilisation scheme if the terms make economic sense.

The airline also backed a partial shift of its Mumbai operations to the new Navi Mumbai airport, accepting slightly higher charges as an investment in future growth.

The takeaway

The loss is shrinking because passengers are paying more, not because costs are under control. That makes IndiGo unusually exposed to two variables it cannot set: crude prices tied to the West Asia conflict and the rupee. If both stay where they are, the festive-quarter fare boost may narrow the loss further but is unlikely to remove it. Any easing in jet fuel would flow straight to the bottom line, which is why the stabilisation scheme matters more to IndiGo than its size might suggest.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.