Interglobe Aviat

IndiGo reported a total income of ₹21,500 crores, a 6% increase YoY, and a profit after tax of ₹2,200 crores with an 11% margin for Q1 FY26. This performance occurred despite significant external challenges^🌐 including geopolitical tensions, airspace restrictions, and the AI171 tragedy, which led to increased block times, cancellations, and moderation in yields. The profit after tax was lower than Q1 FY25's ₹2,730 crores (13.9% margin), reflecting a 20% YoY decline.

The company is expanding its long-haul capabilities by converting 30 Airbus purchase rights into firm orders for widebody aircraft, with deliveries starting from 2032. To bridge the gap, IndiGo signed an agreement with Norse Atlantic for 6 widebodies on damp lease, with one already inducted and 5 more expected this financial year. This initiative has enabled new routes to Amsterdam and Manchester, with plans for London and Copenhagen, and has received positive customer feedback, with flight frequencies to Amsterdam increasing to six a week and Manchester to four a week.

Despite a turbulent quarter, IndiGo served over 31 million customers, achieving a 12% growth in passengers, double the industry average of 6%. The airline's extensive domestic network, with 90% of the Indian population living within 100 km of an IndiGo-served airport, continues to be a key asset, driving strong load factors of around 85%. IndiGo also expanded its international reach through new codeshare partnerships with KLM, Japan Airlines, Jetstar, Delta Airlines, and Virgin Atlantic, enhancing connectivity to global destinations.

IndiGo demonstrated prudent cost management, with fuel CASK reducing by 21.9% YoY due to lower fuel prices, contract negotiations, and redeliveries of older aircraft. CASK ex-fuel ex-forex was ₹2.89, a 1.5% sequential reduction, though up 1.8% YoY. The company is focused on maintaining cost leadership while adapting its network to regulatory directives and safety protocols, including managing the impact of Flight Duty Time Limitations (FDTL) through efficiencies.

IndiGo launched 'IndiGo Ventures' in August 2024, a venture capital arm with a first close of ₹450 crores, making its debut investment in Jeh Aerospace, an aerospace startup. The company also signed an MoU with Bengaluru International Airport Limited to develop MRO capabilities, aiming to improve aircraft availability and cost efficiencies. These initiatives are part of IndiGo's strategy to strengthen its position and prepare for future growth opportunities in the Indian aviation market, including a dedicated state-of-the-art MRO facility.

For Q2 FY26, IndiGo anticipates mid-to-high single-digit capacity growth YoY and PRASK similar to the previous year, reflecting a seasonally softer quarter and planned adjustments. Management expects stabilization in Q2 and remains optimistic for a strong rebound and double-digit growth in Q3 and Q4. The full-year capacity guidance remains at an 'early double-digit growth,' with CASK ex-fuel ex-forex expected to be similar to FY25 levels.