Q1FY27 aviation preview: Analysts advise watching crude and rupee impact

Q1FY27 aviation preview: Key monitorables, Elara Capital said, are the extent of impact on international operations and rise in fuel/non-fuel costs from lower aircraft utilisation & rupee weakening

Aviation companies will unveil their operational and financial performance for the quarter ended June 2026 (Q1-FY27) in the backdrop of high crude oil and aviation turbine fuel (ATF) prices amid the West Asia conflict. From a level of around $60 a barrel in February, crude oil prices hit a high of $130/bbl during Q1FY27 as the West Asia conflict brought the container traffic at the Strait of Hormuz, a transit point for nearly 20 per cent of global oil shipments, to a grinding halt.

 

Key monitorables for Q1FY27, said analysts at Elara Capital, are the extent of the impact on international operations and the rise in fuel/non-fuel cost from lower aircraft utilization and rupee weakening. The positive impact on airfares amid muted passenger growth, on the back of capacity curtailment during the Summer 2026 schedule, they said, is also a key trigger point.

 

 

Among listed players, Elara Capital expects InterGlobe Aviation (parent company of IndiGo) to report a year-on-year  (Y-o-Y) growth of 6.4 per cent in its adjusted net profit in Q1FY27E. The net profit will likely be ₹2,472.4 crore compared to ₹2,323.6 crore during the same period last year, the brokerage said in a recent note.

 

IndiGo’s Ebitda, it said, is likely to grow by 3.1 per cent YoY to reach ₹5,540.4 crore during the period under review. The stock at the current levels, it said, is not fully pricing in the positive impact of increasing fare prices due to limited airline seat supply.

 

According to their estimates, domestic airfares rose by 19 per cent Y-o-Y due to rising fuel costs, a weakening rupee, and a decline in industry capacity. This, it said, can offset the impact of rising fuel costs in Q1FY27.

 

"IndiGo’s overseas fare is estimated to have grown by 40 per cent Y-o-Y which could partially offset a 129 per cent hike in aviation fuel costs and a 17 per cent decline in international traffic amid the US-Iran war," the brokerage said. 

Q1FY27 aviation preview by Elara

 

SpiceJet, on the other hand, is expected to report losses of ₹77.1 crore in Q1FY27 compared to ₹239.6 crore in the corresponding period of the previous financial year, Elara Capital said.

 

Those at Emkay, on the other hand, expect Indigo’s yields to increase 14 per cent YoY to Rs 5.7, supported by fuel surcharges and higher airfares amid the West Asia conflict. However, the sharp increase in crude oil prices and jet fuel cracks is expected to drive up fuel cost/ASK by 45 per cent QoQ.

 

"Available Seat Kilometers (ASK) growth is likely to moderate to 4 per cent yoy (flat qoq) at ₹ 4370 crore, owing to airspace restrictions, while PLFs are expected to improve by ~40bps yoy to ~85 per cent, resulting in Revenue Passenger Kilometers (RPK) growth of 4 per cent yoy to ₹ 3720 crore (down 1 per cent qoq). PBT/ASK (ex-forex) is expected to decline 56 per cent yoy to ₹ 0.25, with net profit at ₹ 1150 crore (versus ₹ 2160 crore yoy), primarily due to elevated fuel costs," wrote Sabri Hazarika and Arya Patel of Emkay in a recent note.

 

"We reiterate our positive stance on IndiGo in the medium-to-long term, as India's aviation demand cycle remains intact, competitive supply stays constrained (as observed in the Summer 2026 schedule). The airline is expected to retain the benefit of the recent airfare hikes," Elara said.

 

Adding: "In our view, the stock is not fully pricing in the positive impact of supply-led fare strength. The focus should gradually shift from crude oil to the durability of airfare strength."  ====================================================== 

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