InterGlobe Aviation, the parent of IndiGo, has postponed salary hikes for senior employees after reporting a quarterly loss, as the airline navigates rising fuel costs and continued uncertainty in the aviation sector.
Speaking during the company's Q1 FY27 earnings call, Chief Financial Officer Gaurav Negi said salary revisions for senior employees have been deferred amid a challenging operating environment. The development comes after the airline swung to a consolidated net loss despite delivering double-digit revenue growth during the quarter, according to reporting by NDTV Profit.
Cost pressures reshape compensation decisions
The decision reflects the airline's focus on cost management as profitability comes under pressure from elevated fuel prices and limited fare pass-through.
During the earnings call, IndiGo co-founder Rahul Bhatia said fuel costs remain high in the near term and the operating environment continues to be volatile. He added that the airline had been able to pass on only a limited portion of the increase in aviation fuel costs to passengers.
Management said the company continues to monitor market conditions while balancing commercial performance with cost discipline.
Revenue grows, but margins weaken
While IndiGo delivered higher revenue during the June quarter, earnings came under pressure from rising operating costs.
Key Q1 FY27 financial highlights include:
- Revenue increased 20% year-on-year to ₹24,584 crore, up from ₹20,496 crore.
- Net profit swung to a loss of ₹238 crore, compared with a profit of ₹2,176 crore in the year-ago quarter.
- EBITDA declined 37% to ₹3,267 crore from ₹5,227 crore.
- EBITDA margin narrowed to 13.3%, down from 25.5%.
- EBITAR, adjusted for foreign exchange impact, fell 34% to ₹3,889 crore.
- EBITAR margin declined to 15.8% from 28.6%.
According to Negi, revenue improved during the quarter because of fare increases, although April was the most affected month. He described May as the strongest month for the aviation industry during the period, while June remained constructive with firm yields and improving international capacity.
Capacity plans remain on track
Alongside the compensation decision, IndiGo said it is rationalising capacity across selected domestic and international routes while maintaining its overall expansion plans.
The airline reiterated its FY27 capacity growth guidance of single-digit growth, with management indicating expansion could move into the early double-digit range thereafter.
Management also said pricing discipline has continued into the second quarter, with passenger load factors remaining broadly stable despite a dynamic market environment.
At the end of the June quarter, IndiGo operated a fleet of 432 aircraft, nine fewer than in the previous quarter.
Industry headwinds remain in focus
The airline said improving yields, stable passenger load factors and continued pricing discipline provide support as it navigates persistent cost pressures.
The postponement of salary hikes for senior employees underscores how airlines are balancing workforce costs with financial performance amid elevated fuel prices and an uncertain operating environment. With capacity growth guidance unchanged, IndiGo is continuing to prioritise operational expansion while maintaining tight control over expenses.