India’s largest airline, IndiGo, reported a loss of ₹2,393.6 crore for the fiscal year ended March, marking its first annual loss since FY23, according to livemint.com. The sharp depreciation of the rupee against the dollar and weak passenger demand contributed to the financial setback.
InterGlobe Enterprises Ltd, which operates IndiGo, attributed the losses primarily to the 11% fall in the rupee versus the dollar. Since IndiGo’s leased aircraft liabilities are dollar-denominated, the currency depreciation increased costs significantly. Additionally, while IndiGo expanded its capacity by 9.5%, passenger traffic rose only 7.5%, leading to a decline in load factors and further pressuring profitability.
This development highlights the challenges faced by Indian airlines amid currency volatility and uneven demand recovery. IndiGo’s loss contrasts with its ₹7,258 crore profit in the previous fiscal year, underscoring the impact of forex fluctuations on carriers with dollar-linked leases. The airline sector’s exposure to global currency movements remains a critical risk factor, especially as fuel and leasing costs are dollar-based.
Looking ahead, IndiGo will need to manage its capacity growth more closely and navigate currency risks to restore profitability. The company’s financial performance will be closely watched in the coming quarters as it adjusts to the evolving market conditions and currency environment, according to livemint.com.