IndiGo on Friday posted a nearly 12 per cent decline in profit after tax at ₹2,728.8 crore in the three months ended June as higher fuel and other expenses crimped the bottomline.

Analysts said the airline reported a decline in quarterly profit for the first time in nearly two years, hurt by higher operating costs that overshadowed largely unchanged fares.

The costs for Indian airlines are expected to rise 3.8 per cent in fiscal year 2025.

In turn, airfares must mirror a rise in costs, ratings agency Icra said in a note earlier this month.

While the total income shot up 18 per cent to ₹20,248.9 crore in the first quarter of the current financial year, the overall expenses, mainly driven by higher fuel costs, jumped 24 per cent to ₹17,444.9 crore.

In the 2023 June quarter, IndiGo’s parent InterGlobe Aviation had a profit after tax of ₹3,090.6 crore.

Excluding the impact of foreign exchange, the carrier’s profit after tax in the latest June quarter was ₹2,786.3 crore, according to a release.

Total income in the year-ago period stood at ₹17,160.9 crore.

The airline’s total expenses surged 24 per cent to ₹17,444.9 crore, with fuel costs rising 22.7 per cent to ₹6,416.5 crore in the three months ended June 2024. In the same period a year ago, total expenses were at ₹14.070.2 crore.

According to the company, aircraft and engine rentals also went up to ₹624.1 crore in the latest June quarter from ₹194.6 crore in the year-ago period.

The load factor, which refers to seat occupancy in a flight, dropped to 86.7 per cent in the quarter under review from 88.6 per cent in the same period a year ago.

“I am pleased to report another strong quarterly financial performance for the first quarter of financial year 2025.

“A continued growth in total income of 18 per cent compared with the same period last year to ₹20,250 crore and a net profit of ₹2,730 crore, resulting in a solid margin of around 14 per cent,” IndiGo CEO Pieter Elbers said.

At the end of June, the airline had 382 planes, including 18 aircraft on wet lease. According to aviation consultant CAPA, India’s airline fleet is set to double by 2030 as carriers could add up to 700 aircraft in the next 5-7 years.

IndiGo, which has around 60 per cent domestic market share, is looking to add at least one aircraft every week.