IndiGo Q2 results: Spotlight on international transfers as potential cushion against forex losses
IndiGo, Q2-26 and Q2-26. When it announced its half results, the airline reported a stellar performance but the depreciating rupee due to loss from foreign exchange hit the airline, pushing it into negative territory. ₹2,582.1 crore. This also dragged the first half of the financial year into a loss. ₹405.8 crore, disappearing ₹Profit of ₹ 2,176.3 crore was made in the first quarter, which was achieved under difficult conditions.
As reported in this article, the airline actually outperformed in terms of RASK (Revenue per Available Seat per Kilometer) and Throughput, increasing by 2.3% and 3.2% respectively. Compared on a yearly basis, revenue from operations increased by 9.3%, while occupancy rates remained stable and passenger numbers increased by only 3%. All this did not help turn profits as losses on Forex climbed to 1,000,000. ₹It rose to Rs 2,892.1 crore from Rs 147.3 crore in the previous quarter. ₹240.6 billion crore in the same quarter last year.
The Indian rupee lost value against the US dollar for various reasons and closed at 88.84 against the dollar on September 30, 2025. The rupee was trading at 83.72 at the end of September last year, down 6.1%. The airline is directly affected because its operating leases are largely denominated in foreign currency pegged to the US dollar. A slight depreciation in the rupee is posing a growing challenge for the airline, which has more than 300 aircraft on operational lease.
International transfers to the rescue?
IndiGo is constantly talking about international expansion, from ordering A350s to doubling firm orders and leasing wide-body aircraft as an interim measure; so much so that almost all of the previous quarter’s capacity increase came from international operations, not domestic. While IndiGo has started its long-haul international services from Mumbai to Europe, it has added flights to destinations in ASEAN and rescheduled many other flights to connect seamlessly to Amsterdam, Manchester and Copenhagen. This included flights from Singapore, Phuket, Bangkok and Colombo (major cities in Europe that feed traffic into the IndiGo network), as well as flights with a mix of direct and multiple one-stop options via other parts of the world.
When the airline sells tickets in a currency other than rupees, it helps cover some depreciation costs. The airline, which has a significant international network serving neighborhood or leisure destinations, still relies on tickets booked in India, in Indian rupees, or India Point of Sale in airline parlance, for its sales. In India, Foreign Tourist Arrivals (FTA) remained silent; The April-June quarter saw only 16.5 lakh FTAs; Data for the previous quarter is not yet available on the Ministry of Tourism website. At the same time, 84.4 lakh Indians visited foreign countries. 10.93 million tourists visited India in 2019; This averages out to over 25 lakh per quarter, but numbers vary depending on seasonality.
Transfer is where this challenge is addressed, with flights booked in foreign currency at foreign outlets and passengers transferring at Indian airports flying between points in Europe and Asia. This not only helps airlines but also reinforces the government’s vision of making India a hub and also helps airports accommodate more passengers without adding stress to check-in and immigration services, while in many cases retail benefits from a portion of food and beverage spend. The same logic follows from Air India rescheduling its flights to Frankfurt, Paris and Australia to provide better connectivity from Australia to destinations in Europe.
Tail Note
After all, the cards appear to be stacked against airlines at the moment, and no amount of capacity rationalization or fare increases have helped, despite the oil price being relatively stable compared to major changes in the past. No matter how good the transfer game looks, IndiGo will have to be ever-vigilant to perfect it, as misconnecting passengers in India means long waiting times, where visa on arrival is not the term. Rival Gulf airlines have multiple frequencies to Europe and therefore have the ability to accommodate passengers on other flights or destinations.
Thus, the focus shifts not only to international flights but also to passengers with international connections. Will it be enough to turn the page and make a profit? An airline aiming to reach 600 aircraft by the end of this decade will need to keep one eye on cost leadership and the other on rupee depreciation and aim to focus rather than squint. With the value of the rupee beyond its control, planning, executing and performing for the airline will likely go back to the drawing board.
Author Ameya Joshi is an aviation analyst.
