IndiGo has issued updated guidance for Q3 FY2025-26, projecting flattish to slight growth in passenger unit revenues with mid-single-digit moderation. Capacity growth is expected in the high single to early double-digit range, though the DGCA’s directive to reduce flights will impact guidance for Q3, Q4, and FY2025-26 overall.
India’s largest airline, IndiGo, has revised its outlook for the current fiscal year following regulatory directives. The airline now expects passenger unit revenues to show flattish to slight growth, with a mid-single-digit downward moderation compared to earlier projections.
Despite this, IndiGo anticipates capacity growth (ASKs) in the high single to early double-digit range for Q3 FY2025-26, supported by strong demand trends. However, the Directorate General of Civil Aviation (DGCA) has ordered a reduction in flights, which will directly affect IndiGo’s capacity guidance for Q3, Q4, and FY2025-26.
The airline has stated it will provide further clarity on the impact of the DGCA order in subsequent updates, including revised guidance for Q4 FY2025-26 and the full fiscal year.
Major Takeaways
Revenue Outlook: Passenger unit revenues expected to moderate mid-single digits in Q3 FY2025-26.
Capacity Growth: ASK growth projected at high single to early double-digit percentages.
Regulatory Impact: DGCA’s flight reduction order to weigh on capacity guidance.
Future Updates: IndiGo to issue revised guidance for Q4 and FY2025-26.
Growth Guidance: Overall trajectory remains in the high-teens range despite moderation.
Conclusion
IndiGo’s updated guidance reflects both robust demand and regulatory headwinds, balancing growth expectations with operational constraints. The airline’s ability to adapt to DGCA directives while maintaining capacity expansion will be closely watched by investors and industry stakeholders.
Sources: Reuters, Economic Times, Business Standard.