IndiGo's Q3FY26 results: Net profit declines 77.6% to ₹549 crore

The company's total revenue in the third quarter increased 6.7 per cent year on year to ₹24,541 crore. Its total expenses increased 9.6 per cent year on year to ₹22,432 crore

The consolidated net profit of IndiGo fell by 77.6 per cent year-on-year (Y-o-Y) to ₹549 crore in the third quarter of 2025-26 (Q3FY26) due to implementation of new labour Codes, rupee depreciation and the operational meltdown in December.

 

The country’s largest airline reported “exceptional items” of ₹1,546.5 crore in Q3, mainly due to a ₹969.3 crore one-time hit from the new Labour Codes and a ₹577.2 crore expense linked to its flight disruptions in December. 

The airline cancelled 4,290 flights between December 1 and December 9 as it did not have enough pilots to implement the new pilot duty rules, which came into effect in November and mandate more humane working hours.

 

Gaurav Negi, Chief Financial Officer of IndiGo, said on Thursday that the airline inducted 36 aircraft on a gross basis during the quarter, including 24 from its order book and 12 through damp leases, while re-delivering 13 aircraft, taking the fleet to 440 planes at the end of Q3. For Q4FY26, he said, the airline expects capacity growth of around 10 per cent year-on-year, a moderation from its earlier guidance of growth in the teens, primarily due to schedule adjustments following “regulatory requirements.”

 

Following IndiGo’s operational meltdown, the DGCA had in December mandated a 10 per cent cut in domestic flights for the entire winter schedule that remains in effect till late March.

 

IndiGo CEO Pieter Elbers did not directly address a question on pilot hiring before and after November, when the new duty and rest norms came into effect, saying only that hiring is a continuous process that is reviewed regularly. He added that pilot recruitment requires long-term planning and depends on several factors, including the number of grounded aircraft, the pace of aircraft deliveries from manufacturers and network planning.

 

During the conference call with analysts, Negi said cost per available seat kilometre (CASK), a key measure of operating cost per unit of capacity, is expected to rise due to the curtailment of capacity by the DGCA.

 

For the near term, IndiGo is guiding for a mid-single-digit increase in CASK in FY26 compared to FY25, adding that this is a short-term outlook and the airline will provide a clearer picture for FY27 as it further refines its numbers, the CFO added. In Q3, the airline’s CASK stood at ₹4.73.

 

The company’s total revenue in Q3 increased 6.7 per cent Y-o-Y to ₹24,541 crore. Its total expenses rose 9.6 per cent Y-o-Y to ₹22,432 crore.

 

“During the third quarter, the Indian government has consolidated multiple existing labour legislations into a unified framework comprising four new Labour Codes. These legislative changes have revised the definition of wages for the purposes of computation of employee benefits, and expanded the scope of eligibility of services related to social security benefits, such as gratuity and compensated absence,” Negi said, elaborating on the aforementioned exceptional items.

 

The airline was compensating the affected customers and in addition, as a “gesture of care”, also extending travel vouchers to the severely impacted customers. “On January 17, the company received an order from the DGCA imposing a penalty of ₹22.2 crore in connection with the operational disruptions. While the order is being evaluated by the company, the amount has been provisioned for as an exceptional item,” he said.

 

“These items -- together with the expenses incurred to provide support and assistance to the impacted customers towards accommodation, transportation, meals, etc -- resulted in a total provision of ₹577.2 crore,” he added.

 

Negi said passenger unit revenue (revenue earned per passenger per kilometre flown) came in at ₹5.2 in Q3, down 4.5 per cent year-on-year and in line with the revised guidance. Yield (average fare per passenger per kilometre) stood at ₹5.33, about two per cent lower than a year ago, while the load factor (share of seats filled) was around 85 per cent, also down two percentage points Y-o-Y.

 

Negi said the rupee depreciated by over one per cent by the end of the third quarter compared to the second quarter, adding to growing foreign exchange headwinds for the airline. He added that the average increase seen through the year has been around five per cent, with the third quarter alone seeing a one per cent increase, and that the rupee was already “behaving the way it’s behaving,” as reflected in recent news.

 

“We’re in the process of conducting an in-depth review of the robustness and resilience of our internal processes to ensure we emerge stronger out of the event (December disruption). Additionally, we have strengthened some of our internal processes and are preparing thoroughly for the transition to the revised FDTL norms in February,” Elbers said. On December 6, the DGCA had placed certain FDTL rules in abeyance for IndiGo until February 10 to allow the airline to stabilise its operations.

 

Elbers said early December was among the most challenging periods in IndiGo’s history, but stressed that the disruption should not define the airline’s overall performance. He said IndiGo delivered one of the highest on-time performance levels among the world’s top 20 airlines in calendar year 2025, and added that the disruption episode had highlighted lessons that would help strengthen systems and improve long-term operational resilience.