Summary
InterGlobe Aviation Limited - Q3 FY26 Earnings Call Summary Thursday, January 22, 2026 5:00 PM
Event Participants
Executives 3 Gaurav Negi (CFO), Pieter Elbers (CEO), Richa Chhabra (Head of Investor Relations)
Analysts 8 Achal Kumar, Aditya Mongia, Amyn Pirani, Binay, Chintan Sheth, Jinesh Joshi, Krupashankar, Pulkit
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income | ₹24,500 crores | +7% YoY; total income for CY2025 reached ₹88,800 crores (+12% YoY). |
| Profit After Tax (PAT) | ₹549 crores | Significant decline from ₹2,400 crores YoY due to exceptional items and forex losses. |
| Adjusted Profit | ₹3,130.6 crores | Excludes exceptional items and currency impact; compared to ₹3,846.1 crores YoY. |
| EBITDAR | ₹6,000 crores | Broadly similar to the same quarter last year despite operational disruptions. |
| Yield | ₹5.33 | -2% YoY; impacted by softer pricing dynamics post-December disruptions. |
| Unit Revenue (PRASK) | ₹4.51 | -4.5% YoY; in line with revised guidance following December cancellations. |
| Fuel CASK | ₹2.37 (Approx) | -3% YoY; driven by negotiated rates and fleet mix despite +2% Singapore Jet fuel prices. |
| CASK ex-fuel ex-forex | ₹2.96 | +2% YoY; driven by annual contractual increases and capacity moderation. |
| Load Factor | 85% | -200 bps YoY; December witnessed subdued booking curves post-disruptions. |
| Total Debt | ₹76,860 crores | Includes ₹52,480 crores in capitalized operating lease liabilities. |
| Free Cash | ₹36,940 crores | Strong liquidity maintained; restricted cash stood at ₹14,660 crores. |
Geographic & Segment Commentary
- Domestic Network: Capacity growth was moderated following regulatory guidance and operational disruptions in December. The airline reduced frequencies on high-density routes (e.g., from 5 to 4 daily flights) to maintain connectivity across its 96 domestic destinations. Strategic expansion continued with the commencement of operations at Navi Mumbai International Airport on December 25, 2025.
- International Network: Remains the primary driver of growth with a disproportionate amount of new capacity allocated here. The company reached a milestone with the induction of the Airbus A321 XLR, launching routes from Mumbai and Delhi to Athens. Strategic focus is on creating a natural forex hedge through increased non-INR revenue streams.
Company-Specific & Strategic Commentary
- Operational Resilience: Management addressed the December 3–5 disruptions involving 2,500+ flight cancellations. A total provision of ₹580 crores was made for customer compensation, travel vouchers, and a ₹22.2 crore DGCA penalty to restore trust and NPS levels.
- Fleet & Asset Ownership: IndiGo inducted 36 aircraft (24 from orderbook, 12 damp leases) and redelivered 13, ending with 440 aircraft. The company is pivoting toward ownership, having prepaid loans for 12 aircraft through its GIFT City entity, bringing the owned/finance-leased portion of the fleet to 20%.
- Product Innovation: The “Stretch” business class product is being expanded to 65 aircraft following positive domestic and international reception. The “BluChip” loyalty program reached 10 million members, aimed at deepening frequent traveler engagement.
- Regulatory Compliance: Management confirmed readiness for revised Flight Duty Time Limitations (FDTL) norms effective February 10, 2026. The 10% Q4 capacity guidance accounts for these stricter crew rest requirements and necessary schedule adjustments.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Capacity (ASKs) | +10% YoY (Q4 FY26) | Moderation due to regulatory schedule adjustments and FDTL transition. |
| Unit Revenue (PRASK) | Early to mid-single digit moderation (Q4 FY26) | Compared to a high base last year (Maha Kumbh) and current booking trends. |
| CASK ex-fuel ex-forex | Mid-single digit increase (FY26) | Driven by capacity moderation, FX volatility, and annual inflation. |
| Asset Ownership | Ongoing aircraft acquisition | Plan to utilize $820M GIFT City investment to increase unencumbered assets. |
Risks & Constraints
| Risk | Context |
|---|---|
| Foreign Exchange | Rupee depreciated 5% YoY and 1% in Q3, leading to a ₹1,040 crore loss on $10B net obligations. Management is mitigating this by increasing hedges to $3B and acquiring owned assets. |
| Regulatory/Labour | New Labour Codes resulted in a one-off ₹970 crore provision for employee benefits. Future employee costs will likely be higher as these provisions transition into recurring line items. |
| Pilot Availability | Transition to new FDTL norms requires higher pilot-to-aircraft ratios. While management claims adequate staffing for current guidance, a global pilot shortage and supply chain issues for aircraft remains a watchpoint. |
Q&A Highlights
Operational Disruptions (Binay, Morgan Stanley)
- Question: What is the impact of December cancellations on capacity and future cost structures?
- Answer: Q4 capacity growth is guided at 10% YoY due to curtailments. CASK ex-fuel for FY26 will rise by mid-single digits due to lower capacity base and FDTL-related staff costs already baked into numbers (Pieter Elbers, Gaurav Negi).
CASK & Forex Volatility (Amyn Pirani, JPMorgan)
- Question: How are exogenous factors like FX and New Labour Codes impacting long-term cost guidance?
- Answer: FX has been a moving target, depreciating faster than the 2-3% initially projected. While the Labour Code impact is currently an exceptional item, it will transition into recurring employee benefit costs from April onwards (Gaurav Negi).
Schedule Adjustments (Prateek Kumar, Jefferies)
- Question: How did the regulator-mandated schedule adjustments impact the network?
- Answer: The regulator directed domestic cuts; IndiGo reduced frequencies on multi-daily routes rather than exiting markets. Connectivity remains intact with 90% of the Indian population living within 100km of an IndiGo-served airport (Pieter Elbers).
Revenue Headwinds (Jinesh Joshi, PL Capital)
- Question: Why did PRASK decline in December after a strong October/November?
- Answer: The 3-day disruption created booking uncertainty, causing customers to shift to competitors. Management expects a return to regular market dynamics shortly (Pieter Elbers).
Key Takeaway
IndiGo’s Q3 FY26 performance was characterized by a sharp divergence between operational scale and bottom-line profitability. While total income grew 7% YoY to ₹24,500 crores and the airline served a record 124 million customers in CY2025, PAT was severely compressed to ₹549 crores by ₹1,550 crores in exceptional provisions (Labour Code and disruption costs) and ₹1,040 crores in forex losses. Strategically, the airline is pivoting toward long-haul international growth with the A321 XLR and Navigating Mumbai expansion, while simultaneously de-risking its balance sheet through GIFT City-based aircraft ownership. Looking ahead, management has moderated Q4 capacity growth to 10% and PRASK expectations to mid-single-digit declines, citing a high base and transition to new FDTL norms. The company remains focused on restoring its hallmark operational reliability while managing a structurally higher cost base driven by regulatory shifts and currency headwinds.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: