IndiGo Braces for $10 Crude Oil Rise Impact

Crude oil prices have reached their highest level in about six weeks, causing concern for airline stocks. For IndiGo, which operates under InterGlobe Aviation Ltd, a sustained rise in crude could put further pressure on margins and earnings.

The airline reported a Rs. 238 crore consolidated net loss in Q1 FY27, despite revenue from operations increasing nearly 20% YoY to Rs. 24,584 crore. Fuel expenses surged 86% YoY to Rs. 10,833 crore, while total expenses increased 34.4% to Rs. 25,853 crore.

Based on IndiGo's disclosed FY25 fuel-efficiency metric and FY26 passenger traffic, annual fuel consumption can be estimated at around 4.2 billion litres. A $10-per-barrel increase in crude translates into roughly Rs. 6 per litre at an exchange rate of around Rs. 95/$, using 159 litres per barrel.

Applying this to estimated annual consumption gives an incremental fuel-cost impact of approximately Rs. 2,500 crore a year. At $100 Brent versus $80, the equivalent rises to around Rs. 4,050 crore, while at $110 it reaches nearly Rs. 7,500 crore.