Indigo smashes past $10 billion revenue mark

At the moment, India’s listed aviation space might as well be synonymous with a single behemoth: Indigo Airlines. The company controls nearly 65% of all Indian aviation — nearly 25 times that of its only listed rival, Spicejet.

This is why, to us, understanding how Indigo works is central to understanding India’s aviation industry.

Airlines are a famously tricky business to run. Aircraft fleets are staggeringly expensive to maintain. A lot of those costs stick around, whether or not a company has passengers to cater to. You can’t really cut corners with aircraft maintenance; risking a plane crash is simply not an option.

Meanwhile, no airline is guaranteed passengers. No matter what an airline does, unless people have an extraneous reason to travel, they just won’t buy a ticket. And so, to a great extent, an airline’s sales are not driven by its own policies, but by the broader economic climate around them.

Their business is also constantly hit by all sorts of factors that lie outside its control — from oil prices, to pandemics, to the outbreak of war. Regulators, too, monitor the sector closely and intervene often, because no government wants to risk a single aircraft failure. Once again, these create risks that a airline company has no control over.

In essence, if you’re running an airline, you’ve to put gigantic sums of money on the line, and whether you’ll recoup those sums is outside your control. That’s why so many airlines across the world go bankrupt so often. In this business, there’s really just one option you have: put your head down, run your operations as smoothly as possible, and hope for the best.

That’s the game that Indigo’s playing. And to us, at least, it looks like it’s playing the game rather well.

How Indigo’s quarter went

The quarter gone by was an exceptional one for Indigo’s business.

The company’s revenues for the quarter went up by nearly 25% over the same quarter last year.

Its expenses, meanwhile, rose much slower: by 19.1% year-on-year.

In other words, the company posted much better margins this quarter. Its EBITDA margin went up to 27.5% in Q4, compared to 22.4% last year. This was quite a leap, and that showed up in the company’s earnings. Indigo’s EBITDA went up by a giant 59% year-on-year. And with that, the company’s net profit shot up by nearly two-thirds within the space of a year — from ₹1,895 crore to ₹3,068 crore.

This capped off a great year; for the first time ever, the company’s total revenue over the year broke past the $10 billion mark.

What’s behind this performance?

For one, the company’s just growing its business.

Indigo added more aircraft to its fleet (434, against 367 last year), and it ran longer routes. Airlines usually count both together in something called “Available Seat Kilometers” — or ASK: the number of seats, multiplied by the number of kilometers they’ve flown. Indigo improved its ASK to 42.1 billion in Q4 FY 2025, compared to 34.8 billion last year.

It also managed to fill most of these new seats. Indigo boasted a ‘Passenger Load Factor’ of 87.4% over the quarter — an improvement from last year’s 86.2%. Roughly speaking, that means 87.4% of its seats were occupied over the quarter.

In short, the company’s margins, to a great extent, are just a result of it running a tight (air)ship. But, with that, it also caught some lucky breaks.

For one, oil prices fell over most of the year, and Indigo pocketed most of the gains. It was paying ₹1.60 per-seat per-kilometer in fuel, compared to ₹1.76 a year ago. Sounds like a minor shift, we know, but those savings can add up.

Two, this quarter featured a once-in-a-decade gathering — the Mahakumbh — with its 66 crore attendees. It also saw the upside of a longer wedding season.

Zooming out, there’s also a longer-term trend that has helped the airline soar: fewer grounded aircraft. This is a problem that has haunted the airline for the better part of a decade. Back in 2016, Indigo inducted a series of A320 Neo plans, which featured Pratt and Whitney engines. Those engines, however, weren’t up to the mark: and started seeing serious failures. Airlines all over the world — Indigo included — were forced to ground their fleets as they scrambled for answers. Finding new airplane engines, however, wasn’t easy — and became much more difficult as all operations stalled during the pandemic. To get by, Indigo had to lease aircraft, which sent up its costs.

The problem peaked early in 2024, when it was forced to confine more than 70 planes to the ground. But slowly, things have been improving. Nearly half of its grounded aircraft are now back in action, and with it, the company’s able to shed its leasing costs.

Is Indigo premiumising?

Indigo is famously a low-cost carrier. That is how it first made its mark in an industry that featured ‘full-service’ carriers like Jet Airways and Air India.

Only, it looks like the company’s slowly moving to slightly premium offerings. Over the last year, it launched a loyalty program, “BlueChip”. It also began something resembling a business class — ‘Stretch’ — with complementary meals, better baggage allowance, and nicer seats. It has started running wide-body flights over an ever-increasing list of international routes: moving away from its staple fare of no-frills narrow body aircraft.

In other words, after surviving a market that saw a steady parade of full-service carriers crashing out, Indigo is slowly starting to look like those that it replaced. So what gives? Is Indigo pivoting to a new strategy?

For now, the company insists that’s not the case. The company stands for lean operations, not sub-standard products, and that continues, as its management clarified:

“I think you should make a difference between ‘low cost’, and ‘low cost operations’ or a ‘low cost basis’ if you wish. And I think IndiGo prides itself — and we remain committed to that — to be an operator with a very low cost basis. That has not meant domestically that we're having a product which is not high quality.”

Perhaps. It’s interesting, nevertheless. The company is experimenting with a new sort of game, and we’re curious to see how it goes.

The geopolitical question mark

If you’re following the airlines sector, though, you’re probably as interested in what happened after the quarter as you are in Indigo’s quarterly results themselves.

After all, once Pahalgam was hit by terror attacks, the India-Pakistan tensions that followed threw up serious challenges for the airlines industry. Tourism took a sharp hit as tensions began to boil. Pakistan, meanwhile, shuttered its airspace. And then, once May rolled around, the two countries started exchanging blows. Within the space of a single month, a large chunk of the sub-continent turned into a big no-fly zone.

How does an airline company see this sort of a situation?

Right from April 22, when the attack took place, Indigo saw a wave of cancellations. Soon afterwards, Pakistan’s airspace closed up. The company had to suspend flights to two cities — Tashkent and Almaty — while for 34 routes, it had to go all the way around Pakistan. That added 20-30 minutes to flight times, and drank up more fuel. As tensions increased, in May, it had to suspend operations from 11 airports in North-western India. 170 flights were cancelled. In the meanwhile, its staff had to placate customers that were distressed by this entire situation.

In essence, briefly, the conflict threw the company’s operations in jeopardy.

But that’s where diversification comes in. Indigo flies thousands of flights a day, in regions all across India and abroad. Some of that business was affected by the situation. But the lion’s share of its operations went on as usual. And a month on, things have already started getting back to normal.

There are some minor tremors, still. Indigo’s long-standing partnership with Turkish Airlines, for instance, has suddenly come under question, after Turkey clearly took sides in the recent flare-up. The bottomline, though, is that things are quickly coming back to normal.

Soaring amidst turbulence

For all the chaos baked into the airline business — from unpredictable demand to black-swan geopolitical shocks — Indigo apears to have found some sort of rhythm. It’s running tight operations, flying more passengers farther than ever before, and making more money while doing it.

It isn’t immune to trouble, of course — the recent flare-up in the subcontinent is proof enough of that — but it does suggest something deeper: Indigo’s business seems robust enough to take a hit, adapt, and keep flying.