However, a look at the numbers shows that Q1 domestic traffic in India grew by 4.41% compared to last year, while IndiGo had an upper hand growing at 10% compared to the same quarter last year. The growth clearly is present, though lower than expected but definitely not muted.
How do the numbers stay?
IndiGo carried 2.7 crore domestic passengers in Q1-FY26, a growth of over 10% compared to 2.45 domestic passengers which the airline carried in Q1-FY25. The airline increased its market share from 61% in Q1-FY25 to 64.4% in Q1-FY26. IndiGo had recorded a profit of ₹2279 in Q1-FY25 while in Q4-FY25, a traditionally weaker quarter, the profit had surged to ₹3067 crore.
April to June was expected to be a bumper quarter for airlines, with flights at an all-time high. However, the terrorist attack in April saw an immediate decline in tourists to Srinagar, which was scheduled to have the highest ever flights in history. IndiGo pulled out flights from Srinagar, like most other carriers.
The last-minute redeployment of flights as well as tourists changing plans led to an impact rarely seen in May. Tourists anticipated a retaliation by Indian armed forces and it came in the form of Operation Sindoor in May.
Over 20 airports including Srinagar, Chandigarh and Amritsar were closed for a few days impacting airlines and their network. These were also the days of very low passenger numbers and people stayed away due to uncertainty. Yet, May recorded higher passengers than last May as well as April, though marginally. June on the other hand continued with the historic trajectory even after the crash of AI171 at Ahmedabad which had led to a lot of speculation around the passenger numbers going down due to anxiety amongst flyers.
Domestic still the mainstay
As Pakistan closed its airspace for Indian airlines, Air India was the most impacted. IndiGo shut operations to Almaty and Tashkent, overnight. However, impact on IndiGo was much smaller as compared to Air India because of very limited long haul operations and a scattered network.
The airline operates 11% of its departures on international routes and in terms of capacity by ASK (Available Seat Kilometers) 29% of its capacity is deployed on international routes where it carries 12% of its passengers, a number which has kept growing each quarter but it is not as big to get impacted drastically.
It all then boils down to the main question, will IndiGo declare profits or not? All indicators point to profits but wafer thin. The ATF prices are lower by about 14% over the same period last year which will cushion the other negatives of the quarter under discussion. However, the rupee has depreciated between 2% – 3.5% for the same period compared to last year.
What to look out for?
The airline has changed its deployment of Stretch, its business class equivalent product. The airline was to induct 45 planes and cover 12 city pairs within India by November. Instead it has started deploying the planes to Singapore and Dubai.
Time and again the airline has said that it is seeing positive feedback for its Stretch product. However, the change in strategy for higher yields on international flights or a function of not having enough passengers on domestic flights will be known over a period of time. The post results analyst call will possibly have a commentary about the performance of its Dreamliner flights to Manchester and Amsterdam, along with the outlook on grounded planes—compensation for which is being accounted as part of income by the airline.
The airline will have to return the three B777s it has on damp lease from Turkish Airlines at the end of August. These flights are being replaced by the A320 family aircraft which will need a technical stop to reach Istanbul. More Dreamliners will enter IndiGo’s fleet by September and will the management spill beans on its deployment? All eyes are on the profits and if the airline manages it in four digits or shrinks to three digit profits or worse, does not record any?
