Overview of IndiGo’s Financial Performance in Q3 2024
IndiGo, India’s leading airline by fleet size and passenger volume, has reported a significant financial downturn in the third quarter of 2024. The airline, operated by InterGlobe Aviation, suffered a substantial loss, marking its first quarterly deficit in two years. This period ended with a loss of ₹986 crore, contrasting sharply with the ₹188 crore profit reported in the same quarter of the previous year. This shift has led to a notable 8% drop in share value by the close of trading on October 28, 2024, after initially plunging by 13.4% earlier in the day. This decline is the most significant since March 2022, taking shares down 25% from their peak in mid-September 2024.
Several factors contributed to this downturn, notably high fuel prices and increased ground handling costs. Additionally, the airline faced challenges such as the grounding of numerous aircraft for Pratt & Whitney geared turbofan engine inspections, the necessity of leasing substitute aircraft, fluctuating seasonal demand, and broader inflationary pressures.
Revenue and Expense Dynamics
Despite a 13.6% increase in operating revenue, reaching ₹16,969 crore, the growth rate has decelerated compared to the 20% hike observed in the corresponding quarter of 2023. This slowdown is attributed to early- to mid-single-digit moderation in passenger unit revenues projected for the third quarter, as compared to last year. Total expenses for the airline surged by 22% year-on-year, amounting to ₹18,666 crore, further straining the financials.
The number of A320 family aircraft grounded due to engine issues has seen a slight decrease from the mid-70s to the high 60s. This number is expected to drop to around 40 by March 2025 as engine inspections conclude and leased aircraft are returned. This reduction should provide some relief to the airline’s operational costs and improve its financial outlook.
Strategic Initiatives and Future Plans
In response to these challenges, IndiGo is aggressively pursuing growth opportunities and operational enhancements. The airline plans to introduce flights to five new destinations by March 2025, including Penang and Langkawi in Malaysia, and has recently started direct flights to Jaffna in Sri Lanka. To capture the rising demand for international travel from India, IndiGo is increasing its capacity on international routes to 30% of its total capacity.
Moreover, IndiGo is innovating its service offerings. In August 2024, the airline announced the launch of a business class product and a new loyalty scheme, signaling its commitment to enhancing passenger experience and building customer loyalty. Additionally, a significant development came in April 2025 when IndiGo placed an order for 30 Airbus A350-900s, with an option for 70 more. These aircraft are intended for long-haul flights to the United States and Europe, marking the airline’s ambitious expansion into new markets.
CEO Pieter Elbers emphasized the dual strategy of capitalizing on growth opportunities while maintaining cost leadership in a competitive market, reflecting the airline’s resilience and proactive approach in navigating the turbulent aviation landscape.