Indian airline IndiGo posts quarterly loss on capacity curbs, declining Indian rupee

Indian budget carrier IndiGo reported a fourth-quarter loss on Friday as the country’s top airline struggled with domestic capacity, a declining rupee and soaring fuel prices.

The airline posted a loss of 26.62 billion rupees ($280.2 million) for the quarter ended March 31, compared with a profit of 30.73 billion rupees in the year-ago period.

During the quarter, the airline had to cut its domestic capacity by 10% on orders from the country’s aviation regulator after mass cancellations in December that led to one of the country’s worst aviation crises and the abrupt exit of its CEO.

Quarterly revenue grew 1.3%, however, expenses jumped at a faster pace, up nearly 31%.

IndiGo, Air India cut June-July domestic flights amid high jet fuel prices, sources say

Over 60% of IndiGo’s costs are directly or indirectly dollar-denominated, and a depreciating local currency has been driving up overall expenses for the company.

IndiGo’s forex losses came in at 48.82 billion rupees during the quarter, compared with a gain of 1.38 billion rupees last year.

Moreover, soaring fuel prices due to supply constraints following the Iran war, also ate into the airline’s margins.

Airlines such as IndiGo, which do not hedge fuel, have been grappling with soaring jet fuel prices as the Iran war pushed crude to above $100 per barrel.