Steep forex loss prompts IndiGo to eye more foreign flights

The airline’s lease costs rose more than tenfold in the September quarter as the rupee fell against the dollar. Since lease payments were made in dollars, the 1.7% depreciation in the quarter caused a foreign exchange loss of 200 thousand TL. ₹IndoGo stated that it incurred a forex loss of around ₹ 2,892 crore during the period. ₹240.6 crore a year ago

The company gave a report ₹2,582 crore net loss in September quarter ₹2,176 crore profit loss in June quarter ₹987 crore a year ago.

Chief executive Pieter Elbers said the airline was looking at “internationalisation” as a strategy, which included flying to more destinations that generated “non-rupee revenue” in euros, pounds or dollars. “This gives us a natural hedge against currency fluctuations,” he said.

Revenues fell 10% sequentially ₹18,555 crore, international destinations hedge against slowing domestic market traffic in the seasonally weak quarter marked by weather-related disruptions and geopolitical tensions. Revenues remained flat in the June quarter ₹20,497 crore. Revenues increased by 11% compared to the same period last year.

Excluding the impact of Forex changes, IndiGo made profits of: ₹104 crore in September quarter ₹2,347 crore profit and 2,347 crore loss in June quarter ₹754 crore a year ago.

Elbers said during the media call that hedging against the dollar had a small positive impact. “The loss resulting from dollar-denominated foreign exchange fluctuations and lease obligations caused us to shift from operating profit to loss.”

IndiGo fleet had 417 aircraft at the end of the September quarter; this was one more than in the June quarter and seven more than a year ago. Business and wet lease aircraft saw a decline respectively, but airline leasing saw a significant increase.

scale up

IndiGo also revised its capacity guidance towards the “mid-age group”, an improvement from the “double-digit growth” it said at the beginning of the year.

Elbers said optimized capacity allocation has already resulted in a 10% increase in revenue and operational profit when excluding the impact of foreign exchange movements. ₹104 crore compared to last year’s operational loss.

“The year started with significant external challenges across the industry, but we saw stabilization in July and a strong recovery in August and September. Looking ahead, we have scaled up our operational plans for the second half to meet demand and sustain growth. However, we have nudged our capacity forecast for the full fiscal year 2026 towards early teenage growth,” he said.

The second half of the year is seen as a seasonally better time for travel, thanks to the numerous holiday and wedding seasons.

The remaining planes remain in the 40s, with only Pratt & Whitney powered planes. Elbers expects the situation to stabilize. “It’s stable in the forties. It doesn’t have a significant impact on the outcome,” he said.

The airline had previously said that it had reached its highest point since the mid-70s in the first and second quarters of the previous financial year.

IndiGo is expected to put one aircraft into service every week in the next few years even as it accelerates the introduction of wide-body aircraft, mostly from Airbus, targeting the growing number of long-haul international routes.

Other metrics

The airline’s revenue fell ₹4.69 for September quarter ₹4.98 in the June quarter and ₹4.55 a year ago. Yield is the average revenue the airline earns per passenger, per kilometer flown.

Load factor (transport efficiency calculated by the number of seats occupied by paying passengers) also fell by 2.1 points to 82.5, respectively, but remained the same compared to the previous year.

From April to June, available seat kilometers (ASK), a measure of an airline’s passenger carrying capacity, fell to 41.2 billion versus 42.3 billion sequentially; This indicates that seat capacities have increased. In contrast, passenger kilometer revenue (RPK) decreased sequentially from 35.7 billion to 34 billion, corresponding to a lower passenger load factor. This shows that demand is decreasing.

Total operating revenue per seat per kilometer flown (RASK) decreased sequentially ₹4.55 versus 4.55 in the September quarter. ₹4.86 in April-June and ₹4.45 in the previous year’s quarter.

IndiGo’s total cash balance was: ₹53,515 crore; ₹38,517 crore in free cash and ₹14,999 crore in restricted cash. Capitalized operating lease liability ₹49,652 crore. Total liability (including capitalized operating lease liability) ₹74,814 crore.