Why Did IndiGo Report a Loss of Rs 2,582 Crore in Q2?
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Synopsis
In a surprising turn of events, IndiGo has reported a staggering loss of Rs 2,582 crore for Q2 FY26, a dramatic shift from last year's profits. Despite this, the airline's revenue from operations has shown growth, driven by increased passenger numbers. What factors contributed to this financial downturn?
Key Takeaways
- IndiGo reported a loss of Rs 2,582 crore in Q2 FY26.
- Revenue increased by 9% to Rs 18,555 crore.
- Passenger ticket revenues grew by 11.2%.
- Forex losses were a major factor in the loss.
- IndiGo’s EBITDAR improved when excluding forex impacts.
Mumbai, Nov 4 (NationPress) Leading airline IndiGo has reported a significant loss of Rs 2,582 crore for the July–September period (Q2) of FY26, a stark contrast to its previous profit of Rs 2,176 crore during the April–June quarter (Q1 FY26).
This loss has escalated from Rs 987 crore in the same period last fiscal year (Q2 FY25), as revealed in its recent stock exchange disclosure.
Despite this setback, IndiGo’s operational revenue increased by 9 percent year-on-year (YoY) to Rs 18,555 crore, largely fueled by robust passenger and ancillary income streams.
Passenger ticket earnings surged by 11.2 percent to Rs 15,967 crore, while ancillary revenues, including baggage fees and in-flight sales, grew by 14 percent to Rs 2,141 crore.
The airline's EBITDAR (earnings before interest, tax, depreciation, amortisation, and rent) experienced a sharp decline, dropping to Rs 1,114 crore from Rs 2,434 crore a year prior.
However, when excluding the effects of foreign exchange (forex) losses, IndiGo's EBITDAR saw a remarkable 43 percent year-on-year increase, reaching Rs 3,800 crore, with margins improving from 15.7 percent to 20.5 percent.
IndiGo attributed its quarterly loss primarily to the adverse impacts of currency fluctuations, resulting in a steep forex loss of Rs 2,892 crore, compared to Rs 241 crore in the same quarter last year.
Without this forex effect, the airline would have posted a net profit of Rs 104 crore, according to its regulatory documents.
Rental and aircraft maintenance expenses rose to Rs 3,262 crore, up from Rs 2,745 crore in the previous year, while tax obligations amounted to Rs 100 crore, an increase from Rs 80 crore last fiscal.
IndiGo’s CEO, Pieter Elbers, commented on the results, stating, “As India’s aviation sector evolves, we understand the necessity of optimizing our capacity during seasonally weaker periods to ensure profitability.”
He emphasized that the airline had achieved a strong operational performance, maintaining its leadership in on-time arrivals and expanding its network.
On Tuesday, shares of InterGlobe Aviation Limited, IndiGo’s parent company, closed down by 1.06 percent at Rs 5,635 on the BSE.
Point of View
I recognize that IndiGo's recent financial results reflect the volatility of the aviation industry. While the loss is concerning, the growth in operational revenue and passenger income indicates resilience. It’s crucial for the airline to navigate these challenges for sustained growth.
NationPress
09/11/2025
Frequently Asked Questions
What caused IndiGo's loss in Q2 FY26?
IndiGo's loss was primarily driven by significant foreign exchange losses amounting to Rs 2,892 crore, alongside rising operational costs.
How did IndiGo perform in terms of revenue?
IndiGo's revenue from operations rose by 9% year-on-year to Rs 18,555 crore, bolstered by increased passenger and ancillary income.
What impact did foreign exchange losses have?
Without the forex losses, IndiGo would have achieved a net profit of Rs 104 crore, highlighting the significant impact of currency fluctuations.
What measures is IndiGo taking for profitability?
IndiGo aims to optimize capacity during off-peak seasons and maintain operational efficiency to enhance profitability.
What does this loss mean for IndiGo's future?
The loss raises concerns but also emphasizes the need for strategic adjustments to ensure long-term sustainability in an evolving market.
