Rs 1,800 crore blow and counting: IndiGo stares at major revenue hit due to flight chaos  

IndiGo's major flight fiasco is set to punch a big red hole in its balance sheet in the third quarter. The losses from IndiGo's flight disruptions are already nearing Rs 1,800 crore and are still mounting.

The immediate revenue hit the airline has already suffered is Rs 900-plus crore, which it refunded due to the cancellation of tickets till December 9. However, this hit will rise further if the airline is directed to pay compensation for tickets that had to be cancelled due to flight disruptions.

According to the airline's latest update, the company cancelled 8.86 lakh PNRs for the period between December 1 to 9. As per the Ministry of Civil Aviation's passenger charter, if a flight for longer than 2 hours is cancelled and a passenger is not informed before 24 hours, the airline has to pay Rs 10,000 or the basic fare plus airline fuel charge - whichever is less - as compensation. Going by the charter, IndiGo is already liable - till December 9 - to pay over Rs 886 crore.

So, refund and compensation, if IndiGo is ordered to pay, have already cost nearly Rs 1,800 crore.  

However, the actual payout is likely to come down as compensation for shorter flight hours is lower. For flights of up to 1 hour, a flyer is entitled to get Rs 5,000 and for 1.5 hours, Rs 7,500.

Besides this, the aviation ministry has also cut 10% of flights during the winter schedule, which runs from the last Sunday of October to the last Saturday of March. 

As per information on its site, IndiGo operated 2,200-plus flights daily. A 10 per cent cut in flights will reduce it to 1,980, which will lead to further revenue loss. IndiGo operated more than 1,800 departures on December 9 and planned around 1,900 on December 10.

IndiGo's top management has yet to comment on its likely revenue hit, and accurate numbers will only be known once the operation stabilises and the company releases its third-quarter results by late January or early February 2026.    

Interestingly, IndiGo reported a significant net loss of around Rs 2,582 crore for the second quarter of FY2025-26. The loss was driven by substantial foreign exchange losses from rupee depreciation and higher maintenance/operational costs.

IndiGO's Chief Financial Officer Gaurav Negi, during an earnings call, had explained that the airline's exposure to foreign exchange risk was primarily from its lease liabilities and maintenance obligations denominated in US dollars. 

"While we have some dollar-denominated assets - in the form of deposits - the net exposure as of the end of September is approximately 9 billion dollars. This would amount to a foreign exchange loss of around Rs 900 crore for every rupee depreciation at the quarter end," the CFO had said.

On September 30, a rupee was at 88.85 against the US dollar, which fell to 89.96 on December 10. So, this one rupee depreciation will also cost IndiGo Rs 900 crore.  

The aviation ministry is also weighing the possibility of imposing a steep penalty, possibly as high as Rs 1,000 crore ($111.8 million), on the airline.

Credit rating agency ICRA, in its latest report, noted that IndiGo's near-term financial performance is expected to be "significantly impacted due to revenue loss from cancellations, refunds, higher operating costs to compensate affected passengers, and potential penalties following an ongoing regulatory inquiry."