IndiGo profit falls 77% in Q3 FY26 due to labour law impact and december flight disruptions

InterGlobe Aviation, the parent company of IndiGo, reported a sharp fall in profit for the third quarter of FY26. On January 22, the airline said its consolidated net profit stood at INR 549.8 crore, down 77.5% from INR 2,448.8 crore in the same quarter last year.

The company said the steep decline was mainly due to the financial impact of new labour laws and the major operational disruption it faced in December 2025. Excluding one-time exceptional items worth INR 1,546.5 crore, IndiGo’s net profit would have been INR 2,096.3 crore, which still marks a 14% year-on-year decline.

Revenue rises but costs increase faster

Despite the profit drop, IndiGo’s revenue from operations rose 6 per cent year-on-year to INR 23,471.9 crore during the October–December quarter.

The airline increased its capacity by 11.2%, while the number of passengers carried rose by 2.8% to nearly 31.9 million during the quarter. However, the load factor (how full the planes were) declined by 2.4 percentage points to 84.6%, and yield (revenue per passenger kilometre) fell by 1.8 per cent to INR 5.33.

Fuel cost per available seat kilometre (CASK) reduced by 2.8% to INR 1.53, but overall operating costs rose nearly 10%, with fuel expenses increasing 8%.

IndiGo said it expects capacity, measured in available seat kilometres (ASK), to grow by 10% in the fourth quarter.

For the quarter, IndiGo reported a technical dispatch reliability of 99.9%. Its on-time performance at six major metro airports stood at 76.6%, while the flight cancellation rate was 1.03%.

Impact of new labour laws

India’s new labour codes came into effect on November 21, 2025. These laws introduce a standard definition of wages and require that basic pay must be at least 50% of an employee’s total compensation. The rules also cover overtime, timely salary payments and other worker protections.

As a result, companies can no longer structure salaries with large allowances to reduce statutory payments. IndiGo said this led to a one-time exceptional loss of INR 969.3 crore.

IndiGo also faced a major crisis in early December 2025, with large-scale flight cancellations and delays across the country. A key reason was a shortage of pilots and crew following the introduction of stricter Flight Duty Time Limitation (FDTL) rules, which require longer rest periods and more humane work schedules.

According to estimates, more than 300,000 passengers were affected during this period. The airline reported a one-time exceptional loss of INR 577.2 crore due to the December disruption.

The Directorate General of Civil Aviation (DGCA) later fined IndiGo INR 22 crore after the airline cancelled 2,507 flights and delayed another 1,852 flights between December 3 and 5, leaving thousands of passengers stranded.

IndiGo CEO Pieter Elbers acknowledged the disruption and apologised to passengers. “This quarter, the Company faced major operational disruptions that resulted in significant flight cancellations and delays from December 3 to 5. We deeply regret the inconvenience caused to our customers and thank them for their patience and trust. I also thank all IndiGo employees who worked tirelessly to stabilise operations and help us return quickly to normal,” he said.

Despite the challenges, Elbers said the airline continued to grow strongly. “We welcomed nearly 32 million customers in this quarter and around 124 million customers in the calendar year 2025. Our long-term fundamentals remain strong, supported by our expanding fleet and growing domestic and international network. We remain committed to reliability, operational excellence and better customer experience,” he added.