IndiGo reported a net loss of 1879.1 crore in Q2 FY2027 despite a 25.9% rise in revenue to 23364 crore. The Indian aviation market would perform much better if airport charges and taxes were lower, IndiGo CEO Willie Walsh said on Monday, amid a challenging operating environment for airlines due to elevated fuel prices and rupee depreciation. The airline industry situation is challenging, but we will continue to navigate through challenges, Walsh said at his first in-person media briefing since taking charge as the chief executive in August.

Walsh said the airline expects to start getting the wide-body A350 aircraft from the second quarter of 2028. The airline has all the ingredients to succeed in the long haul market, he said. We see incredible opportunities, he added. His comments come at a time when the domestic aviation sector is facing pressure from higher operating costs and weakening passenger traffic. Ratings agency ICRA has projected domestic air passenger traffic growth of 3-6% in the current financial year, while international passenger traffic for Indian carriers is expected to decline by 3-6%.

The agency has also estimated that the aviation industry could incur losses of up to 38000 crore in the financial year ending March 2027 and maintained a negative outlook for the sector, warning that a prolonged West Asia conflict could further affect passenger numbers and airline profitability. Domestic air passenger traffic declined 6.5% year-on-year to 118.2 lakh in September, compared with 126.4 lakh in the year-ago month. Traffic was also down 2.5% sequentially from August. In the first half of FY27, domestic passenger traffic fell 1.9% to 78.61 million.

International passenger traffic for Indian carriers contracted 19.3% during the same period, largely due to airspace restrictions and network disruptions amid the West Asia conflict. Higher fuel prices and the depreciation of the rupee have added to the cost pressures. While fuel accounts for around 30-40% of airlines' operating costs, several other expenses, including aircraft leases and maintenance, are linked to the US dollar. IndiGo itself reported a net loss of 1879.1 crore in the September quarter of FY27.

The airline's revenue from operations, however, increased 25.9% year-on-year to 23364 crore in the July-September quarter, compared with 18555 crore in the corresponding period last year. Revenue declined around 5% sequentially from 24584 crore in the June quarter. Its EBITDA rose to 1907 crore from 543 crore a year earlier, while the EBITDA margin expanded to 8.1%. However, the improvement in operating performance was supported by a decline in foreign exchange losses, which more than halved to 1333 crore from 2892 crore in the year-ago period. ATF expenses surged 67% year-on-year to 9967 crore during the quarter, accounting for around 42% of revenue from operations against 32% in the corresponding quarter last year.