InterGlobe Aviation’s Profit Slumps 77.5% in Q3 FY26
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- Last Updated: 23 Jan 2026 at 3:26 PM IST
InterGlobe Aviation, Indigo’s parent company, on January 22 reported a sharp fall in profit for the December quarter. Profits took a hit from new labour laws and heavy operational disruption the company faced since December 2025. InterGlobe posted a consolidated net profit of ₹549.8 crores for Q3 FY26, down 77.5% from ₹2448.8 crores in the same quarter last year.
The company said exceptional items dragged earnings sharply lower. Without these, profit would have stood at ₹2096.3 crores. The result comes at a time when IndiGo controls nearly two-thirds of India’s domestic aviation market and has been aggressively adding capacity. The December quarter also coincided with disruptions across major airports, drawing regulatory scrutiny and fines.
Labour Code Impact Drives Exceptional Loss
A large part of the exceptional charge came from the implementation of India’s new labour codes, which came into effect on November 21. InterGlobe said the one-time loss linked to these changes stood at ₹969.3 crores.
India’s labour reforms consolidate four labour codes into a unified framework. These are the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020.
The new framework introduces a uniform definition of wages. It requires basic pay to be at least 50% of the cost to the company, limiting the use of allowances to reduce statutory payouts.
Other changes include stricter rules on salary delays and overtime payments. For companies with large workforces, especially airlines with complex pay structures, the transition has led to higher employee costs and one-time adjustments.
InterGlobe attributed the labour code impact entirely to exceptional items. The company did not break out the ongoing cost impact from the new rules in its quarterly numbers.
December Disruption Hits Operations
The airline also flagged a significant operational disruption during December that added to the exceptional losses. IndiGo faced mass cancellations and delays across major airports. This was triggered by a sharp shortage of crew, especially pilots.
The shortage followed the introduction of revised Flight Duty Time Limitation norms. The new rules mandate longer rest hours and more humane rosters for flight crew.
Note that the Directorate General of Civil Aviation later imposed a fine of around ₹22.20 crores on IndiGo over the episode. The penalty followed a review of widespread cancellations and delays during the period.
Growth in Revenue from Operations
Despite the profit slump, the company reported steady growth in revenue from operations. It rose 6% year-on-year to ₹23,471.9 crores in Q3 FY26. The airline also expanded capacity during the quarter, with available seat kilometres increasing 11.2% year-on-year to 4,540 crores.
What Investors Should Watch?
The quarter highlights the near-term earnings risk from regulatory changes in aviation, especially labour and safety rules. Airlines with large workforces and fast-growing fleets may face higher costs as new norms settle in. Even the top airlines can’t escape sudden operational hiccups.
For investors, it’s a reminder to watch closely. Margins could take a hit in the next few months. Fuel prices and capacity changes might shake results further. Airlines that control costs and keep things running smoothly will usually have an edge.
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