IndiGo Reports $117.7 Million Loss In Q2 Amid Aircraft Groundings & Rising Fuel Prices

IndiGo has reported a Q2 FY2025 loss, with the airline citing higher fuel costs and the peak of Airbus A320neo aircraft family groundings as the reason behind its massive loss during the financial period, which ended on September 30.

$116 million loss

The airline’s Q2 FY2025 financial report detailed that while the airline’s revenues totaled of INR 177.5 billion ($2.1 billion), its costs ballooned by 21.9% year-on-year (YoY) to INR 186.6 billion ($2.2 billion), resulting in a loss of INR 9.8 billion ($116.5 million).

A detailed cost breakdown by IndiGo revealed that fuel costs grew by 12.8% YoY to INR 66 billion ($784.8 million). In comparison, its costs (excluding fuel) rose by 27.5% YoY, with the airline ending the period with ex-fuel expenses of INR 120 billion ($1.4 billion).

Furthermore, its cost per available seat kilometer (CASK) was INR 4.69 ($0.056). In Q2 FY2024, IndiGo’s CASK was INR 4.19 ($0.050), meaning that the metric rose 11.8% YoY.

In contrast, its revenue per ASK (RASK) grew only 4.8% YoY, going from INR 4.25 ($0.051) to 4.45 ($0.053). IndiGo’s capacity, measured in ASK, increased by 8% YoY, with the airline adding almost 100 aircraft to its fleet by the end of September 30.

According to the airline, it ended the period with 410 aircraft, including 45 ATR 72-600, 41 Airbus A320ceo (17 damp leased and four secondary leases), 201 A320neo, 112 A321neo, three A321 passenger-to-freighters (P2F), two damp leased Boeing 777-300ER, and six damp leased Boeing 737 MAX 8 aircraft.

Just a year prior, IndiGo had 334 aircraft, including less than 100 A321neos, in its fleet.

Normalization in demand

Pieter Elbers, the chief executive officer (CEO) of IndiGo, said that during the quarter, it grounded a peak of around 75 A320neo family aircraft due to the accelerated removals and inspections of their Pratt & Whitney PW1100G engines.

Ch-aviation data showed that IndiGo has a whopping 64 A320neo and 16 A321neo currently inactive, which are powered by the PW1100G. Two of the grounded A321neo aircraft, registered as VT-IBI and VT-IBO, have a pair of CFM International LEAP-1A engines mounted on their wings, according to the site.

Nevertheless, Elbers said that the seasonal trends and a shift in religious periods impacted the low-cost carrier’s performance during the quarter. In addition, the Dutch executive mentioned “some normalization in the demand” compared to last year.

“Currently, while some of the markets are still underserved, some markets, especially international, are witnessing added competitive intensity.”

Elbers highlighted one positive, namely that the groundings of the PW1100G-powered A320neo aircraft family have been trending downward.

Still, while costly, the expensive mitigation measures – adding capacity with second-hand aircraft or leasing other airlines’ aircraft – ensured that IndiGo could continue serving its customers.

Data from the aviation analytics company Cirium showed that in September, out of the 14,759 total weekly flights scheduled by the airline, 582 (3.94%) were operated by other carriers, namely SmartLynx Latvia and Turkish Airlines.

Celebrating 18th anniversary with (business) class

In August, IndiGo celebrated its 18th anniversary, and at the event, the airline said that it would be introducing a business class product on some routes.

Elbers reiterated that IndiGo will begin its first business class flights between Delhi Indira Gandhi International Airport (DEL) and Mumbai Chhatrapati Shivaji International Airport (BOM) in three weeks’ time.

“By the end of 2025, we will launch this on 12 metro routes with a fleet of 40 plus aircraft of this configuration.”

An IndiGo A321neo was spotted wearing a ‘Means Business’ decal at Hamburg Finkenwerder Airport (XFW). The aircraft, with the test registration D-AZWA, operated its first flight on October 11, followed by its second on October 24, Flightradar24 data showed.

During the same event, IndiGo launched its frequent flyer program called IndiGo BluChip. Now, with the program launching in October, Elbers concluded that hundreds of thousands of passengers have already signed up for IndiGo BluChip.