Key points
- Shares fall after weak quarterly earnings
- Forex losses and labour charges hit
- Flight disruptions add significant costs
MUMBAI: Shares of India’s largest airline, IndiGo, fell more than three percent after the carrier reported a sharp 78 percent drop in profit for the December quarter, weighed down by foreign exchange losses, labour-related charges and provisions linked to widespread flight disruptions.
According to CNBC, the airline made provisions of 5.8 billion rupees ($63 million) to compensate passengers after cancelling more than 2,500 flights in early December, an episode that caused major disruption across India’s aviation network. A much larger hit to earnings came from one-time charges related to the implementation of India’s new labour codes and forex losses, together amounting to nearly 20 billion rupees.
IndiGo has also been hurt by a weakening rupee, which has lost around five percent over the past year and is Asia’s worst-performing currency. The rupee was last trading near 91.5 per dollar, with analysts warning it could slide further, intensifying pressure on companies with dollar-denominated costs such as airlines.
Rising costs
Brokerage Jefferies said the March quarter is expected to be weaker despite a rise in passenger capacity, citing moderating yields and rising costs as the airline continues to add aircraft. While maintaining a “buy” rating, it flagged near-term earnings headwinds.
Industry experts say IndiGo may increasingly focus on international routes to boost dollar revenues, as domestic fares remain rupee-based while fuel, leasing and maintenance costs are largely priced in dollars.
IndiGo carried 124 million passengers in 2025, up nine percent year-on-year, underscoring continued demand despite mounting operational and financial challenges.
