IndiGo mulls hedging fuel costs after quarterly loss as crude surge hits margins (updated)

Interglobe Aviation

29/05/2026 11:52

IndiGo swings to loss in Q4
Airline mulls hedging fuel costs amid rising crude prices
Expects Q1 capacity growth to slow to 3%-4% 
Adds details of $450 mln prepayment to its subsidiary in paragraphs 7-8
By Kashish Tandon

    May 29 (Reuters) - India's IndiGo INGL.NS said it will consider hedging fuel costs to protect margins after posting a quarterly loss on Friday, as soaring crude prices driven by the Iran war have pushed up jet fuel prices and squeezed airlines globally.
Jet fuel is typically the largest expense for airlines worldwide, and sharp price swings can erode profitability, particularly for carriers such as IndiGo that do not hedge fuel. 
Airlines hedge fuel costs through financial contracts that lock in prices, helping cushion sudden spikes in fuel costs and improve cost predictability.
"We will be putting our minds to start looking at whether fuel hedging is another option...given what we've experienced in the last three months now," CFO Gaurav Negi said on a conference call.
The airline posted a net loss of 26.62 billion rupees ($280.2 million) for the quarter ended March 31, compared with a profit of 30.73 billion rupees a year earlier, hit by capacity curbs, a declining rupee and higher costs.

SLOWING CAPACITY GROWTH
More than 60% of the company's costs are linked to the dollar, and a weaker rupee pushed up its expenses by 31%. The airline reported a foreign-exchange loss of 48.82 billion rupees for the quarter, compared with a gain of 1.38 billion rupees a year earlier.
IndiGo also approved a plan to partially prepay up to $450 million in lease obligations to its wholly owned subsidiary, which will use the funds to acquire aircraft, engines and parts. 
The approval comes as the company grows its fleet and expands its network. 
Revenue rose 1.3%.
IndiGo, which controls more than 60% of India's domestic market, said it expects capacity growth to slow to around 3% to 4% in the first quarter of fiscal 2027, down from a 16.4% growth a year earlier.
The carrier cut local capacity by 10% under regulatory orders and faced widespread cancellations in December during one of the country's worst aviation crises.
"While the near term remains volatile, we remain firmly focused on disciplined execution, cost efficiency, and long-term value creation," Managing Director Rahul Bhatia said in a statement.

     
($1 = 95.0000 Indian rupees)

 (Reporting by Kashish Tandon in Bengaluru; Editing by Abinaya V, Nivedita Bhattacharjee and Janane Venkatraman)
 ((Kashish.Tandon@thomsonreuters.com; 8800437922;))