IndiGo is set for a soft Q2 as weak domestic travel, fleet disruptions and higher costs squeeze yields; brokers expect a festive-season recovery in H2 as international routes expand.
IndiGo Q2 Earnings Show Pressure From Weak Domestic Demand
IndiGo parent InterGlobe Aviation is expected to report a muted July-September quarter as weaker domestic demand, airport disruptions and lingering fleet issues weigh on revenue and margins. The September quarter is traditionally soft for Indian carriers, but this cycle has been amplified by geopolitical tensions, airport closures and a slowdown in travel sentiment following high-profile incidents earlier in the year.
Operational metrics point to the pressure. July passenger traffic slipped year-on-year, and August also showed decline, signaling lower domestic travel demand that forms nearly 80% of the market. Brokerages and analysts expect load factors and yields to remain under stress in Q2FY26, with carriers cutting fares in parts of the network to stimulate bookings. That dynamic is likely to compress RASK (revenue per seat km) even as airlines hope for capacity discipline to limit downside.
IndiGo still commands a dominant 64% share of the domestic market, but rising costs are a headwind. Yield for the April–June period fell sequentially, while CASK ex-fuel edged up, tightening margins. Fuel continues to be a material cost: aircraft fuel accounted for roughly 28.5% of revenue and 63.5% of operating expenses in the prior quarter, and rupee depreciation exacerbates forex losses on engine leases and international purchases. Analysts at Nuvama and Anand Rathi flag thinner margins for Q2 and expect a recovery only in H2.
