InterGlobe Aviation Limited — Q3 FY26 earnings call

Call held 22 Jan 2026

Management summary

InterGlobe Aviation reported a 7% YoY increase in total income to ₹24,500 crores for Q3 FY26, but profit after tax fell sharply to ₹549.1 crores, impacted by significant operational disruptions in early December, substantial forex losses, and one-off provisions for new labor laws and regulatory penalties. Despite these challenges, the company focused on customer support and operational recovery, while also advancing strategic initiatives like the introduction of the Airbus A321 XLR and expansion of its loyalty program. Capacity growth for Q4 FY26 is guided at ~10%, with unit costs expected to rise due to FX and contractual increases.

Highlights

  • Total income of ₹24,500 crores, up ~7% YoY, despite operational disruptions.

  • Served nearly 32 million customers in Q3 FY26, with 124 million customers in CY25 (9% YoY increase).

  • Successfully introduced Airbus A321 XLR and commenced operations at Navi Mumbai International Airport.

  • BluChip loyalty program reached ~10 million customers, deepening customer engagement.

  • Maintained strong liquidity with ₹36,940 crores in free cash and ₹14,660 crores in restricted cash.

Concerns

  • Operational disruptions in early December led to over 2,500 flight cancellations and hundreds of delays.

  • Profit after tax significantly declined to ₹549.1 crores from ₹2,400 crores last year.

  • Forex loss of ₹10.4 billion due to ~5% rupee depreciation over 12 months.

  • One-off provision of ₹9.7 billion for new labor laws and a ₹222 million DGCA penalty.

  • Capacity growth for Q4 FY26 moderated to ~10% due to regulatory adjustments.

Key financials

  1. Total Income ₹24,500 Cr +7%YoY
  2. EBITDAR ₹6,000 Cr 0%YoY
  3. Profit After Tax ₹549.1 Cr -77.1%YoY
  4. PAT (excl. exceptional/forex) ₹3,130 Cr -18.7%YoY
  5. Passenger Unit Revenue ₹4.51 -4.5%YoY
  6. CASK ex fuel ex forex ₹2.96 +2%YoY
  7. Load Factor 85%

What they filed

Q1 FY27: revenue up 19.9%, net profit down 117.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue16,970 22,111 22,152 20,496 18,555 +9%23,472 +6%22,438 +1%24,584 +20%
EBITDA1,618 5,160 6,082 5,205 545 −66%5,353 +4%741 −88%3,211 −38%
Net profit-989 2,442 3,073 2,161 -2,614 −164%613 −75%-2,662 −187%-382 −118%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex Capex disclosed
    • Acquisition of aviation assets via GIFT city entity $820 Mn
    In the same direction, we had announced a capital investment of 820 million dollars in GIFT city entity to be deployed primarily towards acquisition of aviation assets. We have utilized part of such investment towards prepayment of loans of 12 finance-leased aircraft resulting in ownership of these aircraft. We are building a balance sheet that is not only strong today but capable of supporting the scale and ambition of tomorrow. With this transaction we have a total of 28 owned aircraft at the quarter end and around 20% of aircraft either owned or finance leased.
  • Debt Debt disclosed
    On the balance sheet side, we ended the December quarter with a capitalized operating lease liability of 524.8 billion rupees and a total debt, including the capitalized operating lease liability of around 768.6 billion rupees.
  • Liquidity Cash ₹36,940 Cr
    We continue to maintain strong liquidity as we ended the December quarter with free cash of 369.4 billion rupees and a restricted cash of 146.6 billion rupees.

Guidance & targets

Capacity

  • Capacity growth (ASKs) Capacity · Q4 FY26 · High confidence ~10%
    Moving on to the forecast for the fourth quarter of this financial year, we are expecting to add capacity of around 10 percent as compared to the same period last year.

    — Gaurav Negi

Revenue

  • Unit passenger revenue (PRASK) Revenue · Q4 FY26 · Medium confidence Early to mid-single digit moderation
    Further, on the revenue side, basis the trends that we see in January, we are estimating an early to mid single digit moderation in our unit passenger revenue as compared to a high base of the same quarter last year which had a very strong tailwind in the form of the religious congregation for the Maha Kumbh.

    — Gaurav Negi

Costs

  • Unit costs excluding fuel and forex (CASK ex fuel ex forex) Costs · Full financial year 2026 · High confidence Mid-single digit percentage increase
    We are currently estimating mid-single digit percentage increase in our unit costs excluding fuel and forex for the full financial year 2026 as compared to the full financial year 2025, this revised guidance is based on the revised capacity estimations.

    — Gaurav Negi

What to watch in Q4 FY26

Smooth transition to revised FDTL norms

February 2026
Current Preparing thoroughly
Target Smooth implementation

Why it matters

Ensures operational stability and compliance, directly impacts pilot availability and flight schedules.

Additionally, we have strengthened some of our internal processes and are preparing thoroughly for the transition to the revised FDTL norms in February.

Risks & concerns

  • Operational Disruptions

    high

    Early December disruptions led to over 2,500 flight cancellations and hundreds of delays, impacting Q3 PAT and resulting in a ₹222 million DGCA penalty.

    Management acknowledged

  • Currency Depreciation (FX Impact)

    high

    Rupee depreciated ~5% YoY and 1% QoQ, causing a ₹10.4 billion forex loss on dollar-based obligations, impacting profitability.

    Management acknowledged

  • New Labour Laws (FTDL norms, wage definition changes)

    medium

    Consolidated labor laws required a one-off provision of ₹9.7 billion for revised employee benefits, with recurring impacts expected from April onwards.

    Management acknowledged

  • Capacity Curtailment / Regulatory Requirements

    medium

    Regulatory requirements led to a cut in the domestic network, moderating Q4 FY26 capacity growth to ~10%.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Impact of cancellation episode on capacity and CASK ex-fuel Partial
At this point in time, all our focus is to make sure that we have a smooth transition into the month of February, bearing in mind the capacity curtailment, which is there, which all in all is leading to that capacity guidance, which was just shared by Gaurav, for a growth of 10% year-over-year in this fourth quarter. So, bearing in mind this curtailment of capacity. ... So, Binay, as far as the CASK, like, has been expressed, there is going to be an increase of the CASK given the curtailment on the capacity side. What we are looking at, at least for the short term, to close FY 2026 upwards of mid-single digit compared to FY 2025.

Addresses the financial and operational impact of recent disruptions and provides short-term CASK guidance for FY26.

Asked by Binay from Morgan Stanley

Recurring impact of new FDTL norms on staff costs and CASK Direct
So today, what we've done is we've taken the new labor code as an exceptional item. So, it's not coming in the cost line items. Going forward, the impact of following the new rules is going to start coming in the employee benefits line items. So, this is going to roll over from a catch-up or a true-up of the new rules, which has happened today. Tomorrow, it's all going to be part of the employee benefits line item.

Clarifies how the new labor law provisions will transition from exceptional items to recurring employee benefits, impacting future financial reporting.

Asked by Binay from Morgan Stanley

FX expectations and impact on CASK ex-fuel Partial
The headwind on the FX continues to grow on us. So, it's becoming difficult. I can't pinpoint a number to say that this is what it's going to be. Average increase that we've seen throughout the year has been a 5% increase in FX. When we started the year, it was more towards a 2% or a 3% increase. That's already gone up. This quarter itself has been a 1% increase in FX. The rupee already is behaving the way it's behaving as you would have seen in the news today also. Large part of that cost is again subject to when you're settling those during the quarter.

Highlights the ongoing and increasing challenge from currency depreciation and its impact on costs, with management acknowledging difficulty in precise forecasting.

Asked by Amyn Pirani from JPMorgan

DGCA penalty for operational disruptions Direct
At this point in time, we have no reason to believe so. We have received the orders. The orders are being evaluated by the Board. I think there has been a press release on that from the company when the orders were received, they have been reviewed, and we have no reason to believe otherwise.

Confirms the company's stance on the DGCA penalty and indicates no further immediate higher penalties are expected.

Asked by Chintan Sheth from Girik Capital

Capacity guidance for Q4 FY26 (domestic vs. international) and removal of fare caps Direct
As has been in the past quarters, the growth is going to be much larger on the international side. There is some growth that we've considered in the domestic side. But a disproportionate amount of growth related to the capacity guidance is towards international, which is in line with what the earlier quarters have also been. ... Yes. So again, on guidance on the PRASK side, it does factor in the cap that is in play today.

Clarifies the strategic shift towards international growth and confirms that Q4 PRASK guidance still accounts for existing fare caps.

Asked by Pulkit from Goldman Sachs

Actual pilot shortage number to run full capacity Evasive
I don't think that is a calculation one can make. You make a network and then a network has a link to a number of pilots and depending on rosters, all kind of underlying assumptions. So, we cannot just have a number and say this would have been otherwise the number. ... No, I understand you asked for any number, rough or less rough, but I don't think we're in a position to share any number.

Management avoids quantifying the exact pilot shortage, indicating sensitivity around this operational constraint and its potential impact on capacity.

Asked by Pulkit from Goldman Sachs

Pilot count discrepancy (5,400 vs. 4,600) and line-ready pilots Direct
What probably you have seen is account of the Airbus line-ready pilots. Alongside that, there are other pilots that operate our ATRs also. So, if you add up those, you'll probably get to the number that you're talking about. So, this one is excluding the ATR and this was only for the line-ready pilots database. So, we've got more pilots than the number that you quoted.

Clarifies the different categories of pilots and explains the apparent discrepancy in reported numbers, confirming sufficient pilot availability for current operations.

Asked by Jinesh Joshi from PL Capital

Decline in PRASK in Q3 despite strong October/November trends Direct
You're right. October and November, the demand returned compared to the quarter before. We saw a healthy growth in the market. And clearly, these 3 days, there was an uncertainty how quick IndiGo would restore its operation, and there were different views on how quick the capacity would be back, and that clearly has led to some views in terms of people booking and going in other places. So, I think it's a natural sort of fallout or consequence of those 3 days. And pretty soon, I think we'll be back to regular market dynamics.

Explains that the early December operational disruptions significantly impacted overall Q3 PRASK, even though October and November were strong.

Asked by Jinesh Joshi from PL Capital

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

InterGlobe Aviation reported a total income of ₹24,500 crores for Q3 FY26, a 7% increase year-over-year, despite facing operational disruptions. EBITDAR stood at ₹6,000 crores, broadly similar to the previous year. However, profit after tax significantly declined to ₹549.1 crores, compared to ₹2,400 crores in the same quarter last year, primarily due to exceptional items and currency movements. Excluding these impacts, profit was ₹3,130 crores, down from ₹3,850 crores last year, reflecting the challenging environment.

Operational Disruptions and Recovery

Early December 2025 saw significant operational disruptions, leading to over 2,500 flight cancellations and hundreds of delays between December 3rd and 5th. The company expressed deep regret for customer inconvenience and rapidly mobilized teams across airports, customer support, and operations to restore services. Post-disruption, daily flights scaled back to 2,100-2,200, and customer numbers rebounded to 3.8 lakh plus daily. The company processed timely refunds, extended travel vouchers, and is conducting an in-depth review of internal processes to enhance robustness and resilience.

Strategic Initiatives and Fleet Expansion

IndiGo introduced India's first Airbus A321 XLR, featuring a dual-class cabin, commencing international operations to Athens. The airline also began operations at Navi Mumbai International Airport on December 25th with 15 daily flights to key cities. The business class product, 'Stretch,' launched in November 2024, is now operating on 8 domestic and 9 international routes and is expanding to 65 aircraft. The BluChip loyalty program has grown to approximately 10 million customers, enhancing customer engagement and understanding preferences.

Cost Structure and Currency Impact

The company's fuel CASK reduced by 3% despite a 2% increase in benchmark Singapore Jet fuel prices, driven by negotiated rates, fleet mix changes, and an expanded international network. However, CASK ex-fuel ex-forex increased by approximately 2% year-over-year to ₹2.96, primarily due to annual contractual increases and a 5% depreciation of the Indian Rupee. This depreciation led to a significant forex loss of ₹10.4 billion on dollar-based net future obligations of approximately $10 billion.

Regulatory and Labor Law Adjustments

In compliance with new consolidated labor laws, IndiGo recognized a one-off provision of ₹9.7 billion for revised employee benefits, including gratuity and compensated absences. Additionally, the Directorate General of Civil Aviation (DGCA) imposed a penalty of ₹222 million related to the December operational disruptions, which has been provisioned as an exceptional item. The company is preparing thoroughly for the transition to revised Flight Duty Time Limitations (FDTL) norms in February.

Q4 FY26 Outlook and Capacity Adjustments

For Q4 FY26, IndiGo expects capacity (ASKs) to grow by approximately 10% year-over-year, a moderation driven by schedule adjustments to align with regulatory requirements. Unit passenger revenue is anticipated to see an early to mid-single digit moderation compared to a high base in the previous year, which benefited from religious congregations. The company's full-year FY26 unit costs excluding fuel and forex are estimated to increase by a mid-single digit percentage compared to FY25, reflecting ongoing cost pressures.

Long-term Vision and Growth Strategy

IndiGo served 124 million customers in calendar year 2025, a 9% increase year-over-year, and operated nearly 8 lakh flights, positioning it among the top global airlines. The company continues to focus on operational efficiency, customer service, and long-term growth, aiming to double in size by the end of the decade. Strategic steps include a capital investment of $820 million in GIFT city for aviation asset acquisition and expanding international operations to create a natural hedge against currency fluctuations.

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