IndiGo shares rise 2% after India’s largest airline hikes excess baggage and priority service prices

Synopsis

InterGlobe Aviation, IndiGo’s operator, raised charges for domestic ancillary services, including infant travel, excess baggage and priority check-in and boarding. The revisions increase passenger costs beyond base fares. IndiGo had reported a Rs 238 crore Q1 FY27 loss amid higher fuel expenses, despite strong revenue growth and expanding domestic and international operations.

Shares of InterGlobe Aviation, the operator of IndiGo, gained 2% to their day's high of Rs 4,943 on the BSE on Friday after it raised charges for several ancillary services on its domestic flights, increasing the cost for passengers using services including infant travel, excess baggage and priority check-in and boarding.

The airline has raised the fee for an infant travelling with an accompanying adult from Rs 2,000 to Rs 3,000. The revised fee applies to domestic flights and is charged separately from the passenger’s ticket fare. Under IndiGo’s rules, infants cannot occupy a separate seat and must travel on the lap of an accompanying adult. Each adult passenger can travel with only one infant.

IndiGo has also raised its excess baggage fee to Rs 800 per kg from Rs 700 per kg. Passengers carrying baggage beyond their permitted allowance will therefore pay Rs 800 for every excess kilogram.

The airline has increased the combined fee for priority check-in and boarding to Rs 650 from Rs 450. The Rs 200 increase applies to passengers opting for the service on eligible domestic flights.

The latest changes cover several passenger services and are charged and addition to the base ticket price. The revisions apply to domestic travel and add to the various costs passengers can incur beyond the headline fare.

IndiGo Q1 results

IndiGo reported a net loss of Rs 238 crore in the first quarter of FY27, compared with a net profit of Rs 2,176 crore in the same quarter last year, as fuel costs surged amid the raging Middle East conflict. Revenue from operations rose 20% year-on-year (YoY) to Rs 24,584 crore in Q1 FY27, compared with Rs 20,496 crore in the corresponding quarter of the previous financial year.

However, expenses grew faster than revenue, with total operating costs rising 34% YoY to Rs 25,853 crore. Aircraft fuel expenses jumped 86% YoY to Rs 10,833 crore, adding significantly to the airline's cost burden despite strong demand and higher revenue.

IndiGo's CASK, or cost per available seat kilometre, increased to Rs 5.71 from Rs 4.31 in the year-ago period. CASK excluding fuel also rose to Rs 3.22 from Rs 2.93. Yield improved to Rs 6.04 from Rs 4.98, while RASK, or revenue per available seat kilometre, increased 16.5% to Rs 5.66.

IndiGo's network included 97 domestic destinations and 46 international destinations during the quarter. The airline added six domestic destinations and seven international destinations on a YoY basis. It also served 97 additional international destinations through strategic partnerships.

IndiGo share price

IndiGo shares have fallen over 7% in the past month but have gained 11% over the last six months. Over the past year, the stock has declined more than 50%. However, over a longer-term period, IndiGo has delivered returns of more than 120%.

Disclaimer: This article has been written by Veer Shamra, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.

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