IndiGo's September Quarter: Fuel Took 83% of the Extra Revenue, the Rupee Line Cut the Loss, and Unit Cost Excluding Both Rose 14.6%

IndiGo's consolidated revenue from operations rose ₹48,085 million (our arithmetic) to ₹233,638 million in July–September 2026, and the company still lost ₹18,791 million, against ₹25,821 million a year earlier. The loss is smaller only because the foreign-exchange loss line fell by ₹15,589 million (our arithmetic). Take that line out (with the hedging gains), as the company does, and the result swung from a ₹1,039 million profit to a ₹7,237 million loss. Fares covered the fuel increase with ₹8,035 million to spare (our arithmetic), but costs excluding fuel and forex rose ₹16,611 million (our arithmetic). The filings do not say which of IndiGo's other costs are priced in dollars, and that is the question a reader of its cost advantage most needs answered.

MoatSCORE: 5.41 (read live on the Moat Screener on 30 Oct 2026; first-pass, provisional). Our first-pass note on the company is on its moat page.

The idea in one sentence

A scale cost advantage lowers what an airline spends per seat-kilometre on the things it runs itself, but fuel and the exchange rate are set outside the company, and in a shock quarter the question is how much of the shock the airline can hand on in fares.

The fact that breaks the assumption

The company prints two versions of its non-fuel unit cost on the same page of the deck. "CASK ex fuel" was ₹3.77 against ₹3.71, a rise of 1.8%. "CASK ex fuel ex forex" was ₹3.45 against ₹3.01, a rise of 14.6% ([IP], slide 9; [PR], cost table). A reader who stops at the first number sees a flat cost base. The second says that, outside fuel and the exchange rate, cost per available seat-kilometre (ASK) rose by about a seventh in a year in which IndiGo flew 1.0% fewer ASKs.

The flat version is flat only because forex cost per ASK fell to ₹0.33 from ₹0.70 ([IP], slide 10), the same fall that shrank the loss.

One concrete thing, followed: the company's own CASK bridge

Slide 10 of the deck builds CASK from total expenses less finance income, divided by ASKs, and then peels off fuel and forex. Alongside RASK (revenue less finance income, per ASK) it reads, in ₹ per ASK, all consolidated and all company measures ([IP], slides 8–10):

RASK rose ₹1.21 per seat-kilometre. Fuel alone added ₹0.99 to cost, and the remaining cost excluding forex added ₹0.44. Before the forex line, the quarter moved from a small positive spread of ₹0.09 per ASK to a negative one of ₹0.13 (our arithmetic, on rounded per-ASK figures). The company's own "profit excluding foreign exchange" says the same in rupees: ₹1,039 million a year ago, a loss of ₹7,237 million now ([PR]; both figures are net of hedging gains of ₹2,061 million and ₹1,778 million).

The mechanism: fares paid for the fuel and little else

Fuel was the shock. Aircraft fuel expenses were ₹99,668 million against ₹59,618 million, up 67.2% ([RS]; [IP], slide 9). That is 42.7% of revenue from operations against 32.1% (our arithmetic). The cause the company gives is in note 5 to the results: a "significant increase in Aviation Turbine Fuel" (ATF) price "arising from geopolitical developments in West Asia", a government cap on ATF supplied to domestic airlines of "25% over March 2026 declared prices" from 1 April to 8 June 2026, and then a Price Stabilisation Fund scheme from 9 June 2026. The note says: "The Group opted not to participate in the PSF Scheme", so fuel was accrued "at prevailing market prices in line with agreed contractual arrangements" ([RS], consolidated note 5). The filings do not say why the company opted out, or what price it would have paid in the scheme.

Fares rose to meet fuel, at a volume cost. Yield, passenger ticket revenue per passenger-kilometre, rose 34.3% to ₹6.30. Passenger-kilometres (RPKs) fell 3.7%, passengers fell 4.7% and the load factor fell 2.2 points to 80.3% ([PR]; [IP], slide 7). Passenger ticket revenue rose 29.3% to ₹206,522 million ([PR]). The company's account: "We responded with prudent capacity reduction and yield management, supporting strong revenue performance but only partially offsetting the higher costs", said Willie Walsh, CEO ([PR]). In rupees, the revenue increase of ₹48,085 million (our arithmetic) was 1.2 times the fuel increase of ₹40,050 million (our arithmetic). Fuel absorbed 83% of the revenue gain (our arithmetic), leaving ₹8,035 million against a rise of ₹16,611 million (our arithmetic) in all other costs excluding fuel and forex, which the deck groups as "Total expenses (excl fuel & forex)" ([IP], slide 9).

The other cost lines follow the fleet. Four of the lines that rose follow what the airline owns and leases rather than what it flies (employee costs, up 11.2%, and other expenses, up 10.9%, rose too) ([IP], slide 9, as printed by the company):

Those four lines total ₹87,393 million against ₹76,884 million (our arithmetic), up 13.7% (our arithmetic), while ASKs fell. The fleet explains part of it. The deck shows 442 aircraft at 30 September 2026 against 417 a year earlier, with owned aircraft up to 41 from 14 and finance-leased aircraft up to 66 from 62 ([IP], slide 4). That is 6.0% more aircraft (our arithmetic; the count includes 44 ATRs, 3 freighters and 5 damp-leased B787s) alongside 1.0% fewer ASKs. Our reading: a per-ASK cost advantage is built on keeping the aircraft in the air, so when the airline cuts capacity to protect yield, the cost of the aircraft it holds is spread over fewer seat-kilometres, and the advantage narrows by its own decision. The filings do not split the 14.6% into fleet, maintenance, wages and anything else.

The forex line is the other half of the story. Foreign exchange loss (net) was ₹13,332 million against ₹28,921 million ([RS]). The company reports the average rate at ₹95.09 per US dollar against ₹87.06, and the closing rate at ₹95.85 against ₹88.79 ([IP], slide 9). Net loss narrowed by ₹7,030 million (our arithmetic). The forex line alone fell by ₹15,589 million (our arithmetic), more than twice that. The rest of the result moved the other way, by about ₹8,559 million (our arithmetic; the company's own ex-forex figure, which also strips out hedging gains, is ₹8,276 million). Lease liabilities (current and non-current) stand at ₹850,222 million (our arithmetic: 725,188 + 125,034) against total equity of ₹50,212 million ([RS], consolidated balance sheet), about 17 times (our arithmetic). The half-year cash-flow statement shows an unrealised foreign exchange loss of ₹15,879 million against a half-year forex line of ₹14,157 million, so the unrealised part alone exceeds the whole line, by ₹1,722 million (our arithmetic). Our reading is that the line is mainly a non-cash revaluation of balances, probably including the leases. The filings do not say in what currency the leases are.

What the filings say about quality and standing

The auditors' limited review reports are unmodified in form: "nothing has come to our attention that causes us to believe" the statements have failed to disclose required information or contain a material misstatement ([RS], paragraph 5 of the consolidated report, paragraph 4 of the standalone report), and note 1 says the auditors "have issued an unmodified conclusion on the same". This is a limited review, not an audit. Standalone, the company's loss was ₹20,552 million against ₹26,141 million ([RS], standalone statement); the consolidated figure used in this article is ₹18,791 million against ₹25,821 million.

Other items in the notes: the Competition Commission of India, by its order of 23 July 2026, "kept the investigation in abeyance pending consideration of the Company's proposed commitments", and the company has made no provision (note 4). The only forward statement is on capacity: Q3 ASKs are "expected to grow by early single digits" against Q3 FY26 ([PR]).

Where this breaks

• One quarter, the seasonal low. Walsh calls it the "seasonally soft September quarter". Our arithmetic from the half-year column puts the April–June 2025 quarter at a profit of ₹21,763 million (the six months to September 2025 were a loss of ₹4,058 million, less the September-quarter loss of ₹25,821 million), and the April–June 2026 quarter at a loss of ₹2,380 million ([RS]). A loss in this quarter is not on its own a sign of a broken cost advantage.
• The forex reading may be overstated or understated. Without the currency of the liabilities, our reading of the forex line as mostly revaluation is a reading. The same line fell by half this quarter, and the filings give no reason the base quarter was worse.
• Yield may be scarcity, not a moat. A 34.3% rise in yield on 3.7% fewer passenger-kilometres is the strongest price evidence in the filings. It cannot tell price discretion from a quarter in which fuel pushed the whole industry's fares up and capacity down. The filings contain no rival's yield or load factor.
• The cost rise may be growth. The press release lists 36 international destinations served (the deck counts 42, including 7 non-operational) and five B787 damp-leased aircraft, and the A321XLR is in the fleet ([IP], slides 3–4; [PR]). Costs of new routes and aircraft often come before the revenue. The filings do not say what share of the 14.6% is start-up cost.
• Strongest case against our thesis. IndiGo raised revenue by more than the whole of a 67% fuel increase while losing under 5% of passengers, and it carried ₹399,290 million of free cash at the quarter's end ([PR]). If cost advantage means the ability to take a shock and stay in the business, the quarter is a pass. Our point is narrower: the unit-cost number most often used to show the advantage did not hold in this quarter once forex is taken out.

Why it costs the reader something

A reader who takes "CASK ex fuel +1.8%" as proof of cost discipline has counted a smaller forex loss as operating efficiency. A reader who takes "net loss down to ₹18,791 million" as an improvement has counted the same line twice. What the filings support is narrower: revenue rose by ₹48,085 million against a fuel increase of ₹40,050 million, which left ₹8,035 million for everything else, its non-fuel, non-forex unit cost rose 14.6% as it flew fewer seat-kilometres with more aircraft, and the quarter's loss was cut by a line the company reports but does not break down. Equity fell to ₹50,212 million from ₹69,874 million between March and September (our arithmetic: a fall of ₹19,662 million) against lease liabilities of ₹850,222 million, so, on our reading that the leases move with the rupee, the same exchange rate that moved this quarter's result sits on a balance sheet that is large relative to the equity beneath it. Our MoatSCORE on the Moat Screener is 5.41 (first-pass, provisional, read live on 30 Oct 2026); it was set before this quarter's filings and is not a conclusion about this result.

What to watch

1. The split of the forex line between lease liabilities and other balances, and the currency of the leases, in the call recording ([CR]) or the next filings. Without it, no reader can say which of IndiGo's costs are dollar-linked.
2. CASK ex fuel ex forex (₹3.45 here) in the December quarter, and whether it rises again while capacity grows by "early single digits".
3. Yield and load factor together: yield of ₹6.30 with a load factor of 80.3%. If fuel eases and yield falls faster than cost, the margin goes first.
4. Fuel as a share of revenue from operations: 42.7% in this quarter against 32.1% (our arithmetic).

The concrete thing, again

The slide-10 bridge reads: CASK ₹6.22, fuel ₹2.44, forex ₹0.33, CASK ex fuel ex forex ₹3.45. A year ago the forex piece was ₹0.70 and the final line ₹3.01. Fares did most of the work against fuel. The rupee line made the headline loss look smaller. The line that is meant to show the scale advantage rose 14.6%, and the filings do not say which part of it is dollars.

Sources

• [RS] InterGlobe Aviation, results for the quarter and half year ended 30 Sep 2026, notes and review reports (NSE)
• [IP] InterGlobe Aviation, earnings presentation Q2 FY27 (NSE)
• [PR] InterGlobe Aviation, press release on Q2 FY27 results (NSE)
• [CR] InterGlobe Aviation, intimation of the earnings-call audio recording (NSE)
• [MP] InterGlobe Aviation Moat Analysis: Score & Risks, with How MoatSCORE works

Educational research, not investment advice. Every figure above is drawn from InterGlobe Aviation's own filings, read from the primary documents on 30 October 2026; derived figures are our arithmetic, labelled as such. MoatSCORE: 5.41 (read live on the Moat Screener on 30 Oct 2026; first-pass, provisional). No buy/sell recommendations, no price targets, no share prices. Moat & Margin is not a SEBI-registered Research Analyst or Investment Adviser.