According to the airline’s CFO Gaurav Negi, the airline will continue evaluating opportunities to increase hedging coverage going forward. | Photo Credit: PTI

Foreign exchange volatility continues to remain one of the biggest risks for IndiGo, said the airline’s parent company, InterGlobe Aviation.

As per the company, every ₹1 movement against the US dollar translates into nearly ₹900 crore of balance sheet impact for the airline.

Speaking during an analyst call following the company’s Q4FY26 earnings announcement, the airline’s management said IndiGo’s total foreign exchange exposure currently stands at nearly $10 billion, of which around $1.3 billion has been hedged.

According to the airline’s CFO Gaurav Negi, the airline will continue evaluating opportunities to increase hedging coverage going forward.

Owning Aircraft

Besides, the management said excess cash beyond the airline’s 20–25 per cent revenue safety net, estimated at around ₹20,000 crore - ₹25,000 crore, will be utilised to acquire aircraft outright.

Furthermore, he cited that owning aircraft instead of leasing them will help the airline reduce lease-related costs as well as lower foreign exchange exposure.

Answering another question, Negi said the airline’s immediate priority is returning expensive damp leases and phasing out older fuel-inefficient aircraft, including A320 CEOs, while maintaining existing aircraft delivery schedules.

He pointed out that the airline will continue evaluating utilisation levels of older A320 CEO aircraft while gradually phasing them out.

Soft Demand

Meanwhile, the airline expects the number of grounded aircraft to reduce from the current levels in the 40s to the 30s in the coming months.

On the demand environment, Negi said April witnessed relatively soft demand trends, while bookings and traffic trends turned positive in May.

He also said the airline has been actively increasing fares to offset rising costs, though fuel surcharge increases have not yet fully compensated for the rise in fuel costs.

Base Effect

As per the management, IndiGo expects mid-teen unit revenue growth during the first quarter of FY27, partly aided by fuel surcharge adjustments and a favourable base effect.

On international operations, Negi said IndiGo earlier operated nearly 160 flights to Gulf and European destinations, of which nearly two-thirds of the capacity has already been restored.

He added that the airline expects full restoration of the affected international capacity by the end of June.

Additionally, the airline expects capacity addition in the Indian market to be around 3-4 per cent year-on-year during the first quarter of FY27.

“Our readiness in FDTL is complete and will remain so in the future,” the airline’s Managing Director Rahul Bhatia said, referring to flight duty time limitation norms.

Core Strategy

Responding to a query regarding the role of Willie Walsh at IndiGo, Bhatia said the airline’s single-aisle aircraft programme centred around A320 and A321 aircraft will continue to remain core to the company’s long-term strategy.

“Our single aisle programme (A320s/A321s) will always be central to the future of the company. We are adding mutations with XLRs and A350s — that will be the hybrid model and that is something Willie Walsh is experienced in,” Bhatia said.

“While we widen our international footprint, we will protect our core domestic business,” he added.

The airline ended FY26 with a total cash balance of ₹51,650.6 crore, including free cash of ₹36,216.3 crore.

In addition, InterGlobe Aviation said total debt, including capitalised operating lease liabilities, stood at ₹77,749.2 crore.

As of March 31, 2026, IndiGo operated a fleet of 441 aircraft and provided scheduled services to 97 domestic and 45 international destinations.

Published on May 29, 2026