# IndiGo faces rough weather in Q1, hit by skyrocketing fuel prices — retained record

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source: [news](https://highsignal.app/data/news) (news:india-mint-markets)  published 2026-07-24 08:26 ingested 2026-07-25 07:59

[original source ↗](https://www.livemint.com/market/mark-to-market/indigo-q1fy27-results-crude-oil-prices-west-asia-war-fuel-costs-outlook-11784876940397.html)

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InterGlobe Aviation Ltd’s (IndiGo) June quarter (Q1FY27) results show how deeply vulnerable it is to higher crude oil prices. The first-quarter Ebitdar declined by 33% year-on-year to ₹3,800 crore, mainly because fuel costs rose as much as 86% to ₹10,833 crore. Additionally, rupee depreciation led to 11% growth in other cost components, pushing the airline into the red.
While the easing of crude prices was expected to bring some relief, the recent flare-up has added to the uncertainty. Nuvama Institutional Equities has cut its FY27/28 estimated Ebitdar by 10%/9% as it increased CASK forecasts driven by higher fuel. CASK is short for cost per available seat kilometre and Ebitdar stands for earnings before interest, tax, depreciation, amortization, and aircraft rentals.
Developments following the joining of the new chief executive, Willie Walsh, expected in the first week of August, would also be a key monitorable. Recall that the former CEO Pieter Elbers had resigned in March, following the severe operational disruption IndiGo faced in December.
Q1 performance
Q1FY27 revenue rose by 20% on-year to about ₹24,600 crore, aided by 21% rise in yield (revenue per passenger per kilometre) to ₹6.04, helped by the fuel surcharge imposed by the airline. However, the airline faced constraints in increasing its total capacity due to the disruption in international flights, with available seat kilometres (ASK) growing only marginally by 3%.
The airline operated close to 150 daily flights to West Asia before the war, which had declined to a low of 30, and has reached to about 90% now, the management stated during the earnings call. ASK guidance for Q2, a seasonally weak quarter, remains flat, and is in the single digit for FY27.
“While higher CASK ex-fuel, and geopolitical uncertainties may weigh on near-term earnings, we believe the structural earnings story is intact,” noted JM Financial Institutional Securities, citing its dominant market position, disciplined capacity deployment, superior cost structure and multi-year international expansion opportunity.
IndiGo’s market share rose to 65.4% in Q1FY27, against 64.4% a year ago, according to the latest DGCA (Directorate General of Civil Aviation) data. Media reports suggested the government is considering allowing airport operators to enter the airline business to reduce the market duopoly, as the top two aviation companies account for nearly 90% of the market share.
This week, IndiGo signed a memorandum of understanding with CFM International, a joint venture between GE Aerospace and Safran Aircraft Engines, to supply 1,000+ LEAP-1A engines. The engines would be fitted to the 520 Airbus aircraft ordered by IndiGo in June 2023, with delivery scheduled between 2030 and 2035. More importantly, the MoU also includes support to establish IndiGo's upcoming MRO (maintenance, repair and overhaul) facility for engines, which should help reduce the airline's maintenance cost.
Shares of IndiGo are trading at about 50 times its FY27 estimated earnings, according to Bloomberg, notably higher than its long-term average multiple. Easing of crude prices and demand revival after Q2 would be essential for the airline to see an earnings recovery.
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