InterGlobe Aviation Ltd, which operates India’s largest airline IndiGo, may increase airfares to offset rising costs, Chief Executive Officer Rahul Bhatia said, as a steep surge in aviation turbine fuel (ATF) prices continues to weigh on airline operations globally.
He added that passengers have continued booking tickets despite higher fares.
“For us, it is very clear that we need to take fares up to protect ourselves against some of these additional costs that are showing up. For the moment, what we are discovering is that the fares are sticking. The demand is there,” Bhatia said during IndiGo's Q4FY26 earnings call with analysts on Friday.
He added, “You obviously have to take the pricing up to the point where you start to see elasticity come in. For the moment, what we are seeing is as we take the fares up, the market is inelastic to these hikes in fares. We just deal with this on a daily basis and see where we go.”
Global energy prices, including jet fuel, have risen sharply since tensions escalated in West Asia on February 28. The global average jet fuel price last week declined 1.7 per cent from the previous week to $159.85 per barrel. Before the crisis began, prices had remained below $100 per barrel.
Bhatia said that since March, the escalation of geopolitical conflict in the Middle East has disrupted several routes and led to a sharp increase in jet fuel prices.
In response, airlines worldwide, including IndiGo, have had to take short-term measures to protect operational viability, he said.
Hit by a weakening rupee amid a challenging external environment, InterGlobe Aviation reported a net loss of Rs 2,536 crore for the quarter ended March 31, 2026 (Q4FY26). The company had posted a net profit of Rs 3,067 crore in the corresponding quarter of the previous financial year.
Industry experts expect headwinds for the aviation sector to continue. To reduce expenses and protect margins, airlines are cutting flights on unprofitable routes and frequently revising fares.
According to ICRA, domestic air passenger traffic in April 2026 was estimated at 140.8 lakh, down 1.6 per cent from 143.1 lakh in April 2025 and 2 per cent lower than 143.7 lakh in March 2026.
ICRA also noted that domestic ATF prices announced on May 1, 2026, remained unchanged sequentially but rose 23.5 per cent year-on-year, following a 9.2 per cent sequential increase and an 18.2 per cent annual rise in April 2026 due to the escalating West Asia conflict.