IndiGo Calls for Lower Airport Charges and Taxes Amid Rising Operating Costs

IndiGo has called for lower airport charges and taxes, warning that rising operating costs are putting pressure on airlines’ financial sustainability as the industry grapples with record-high aviation turbine fuel (ATF) prices . Chief executive Willie Walsh said the sector needed a more competitive cost structure amid mounting fuel expenses and geopolitical disruptions. “Airport charges are too high. We would do much better if we had lower taxes. So lower taxes, lower airport charges. That’s the way forward,” Walsh said during his first media interaction since taking charge of the airline earlier this year. He said airport charges had increased around 4% in the second quarter, while airlines were seeking better value from airport operators. The demand comes as airlines grapple with an unprecedented increase in jet fuel prices , driven largely by an unusually high crack spread — the difference between crude oil prices and refined jet fuel prices. Walsh said the spread, which averaged around 22% between 2000 and 2025, had risen to approximately 65%. Walsh said fuel accounted for more than 40% of IndiGo’s costs, compared with about 32% for the global airline industry, as Indian airlines remain exposed to the full volatility of jet fuel prices. Airlines here do not hedge their fuel costs. The airline is also reviewing its fuel hedging policy but is not currently hedging its fuel requirements. Walsh said the carrier would undertake a comprehensive review before taking a decision, adding that fuel hedging was primarily a risk-management tool rather than a bet on oil prices. While Asian airlines typically hedge around 40% of their fuel requirements, European carriers hedge 70-80%, he said. IndiGo is also examining a proposed fuel price stabilisation scheme but has not participated so far, citing cash-flow considerations. Walsh said IndiGo was attempting to absorb as much of the increase as possible but acknowledged that passengers could face higher airfares if costs remained elevated. “We understand that people would prefer to have lower prices, but we have to have an eye on the financial stability of the company. We’re trying to absorb as much as we possibly can,” he said. He acknowledged that higher ticket prices could weigh on passenger demand but said maintaining the airline’s financial stability was necessary. IndiGo reported a net loss of around Rs ₹1,879 in Q2. Geopolitical disruptions are adding to operational pressures. IndiGo has reduced around 30 flights daily, primarily services to and from Saudi Arabia, amid continuing tensions in West Asia and airspace restrictions. The closure of Pakistani airspace has also forced Indian carriers to recalibrate their networks. Walsh said IndiGo would restore services only when it was safe to do so, reiterating that passenger safety remained the airline’s priority. IndiGo is targeting the first delivery of its Airbus A350-900 aircraft in the second quarter of 2028. The airline has 60 A350s on order and plans a three-class configuration, including business class and premium economy, as it prepares to expand long-haul international operations. Despite its ambitions in the premium and long-haul segments, Walsh maintained that IndiGo would continue to operate as a low-cost carrier, with its expansion strategy built around strengthening its existing network while gradually entering new international markets. IndiGo is currently recruiting pilots in anticipation of future growth and the airline’s expanding operations, Walsh said, adding that till September, they had around 6,300 pilots.