Indian Aviation Q1FY27 preview – some pain is yet to unravel

Research evidence excerpt

Indian Aviation Q1FY27 preview – some pain is yet to unravel

14 July 2026

Indian Aviation EquitiesAirlines

Q1FY27 preview – some pain is yet to unravel India

◆ Fuel price has fallen by >50% from recent peak, but fares

remain above company guidance and capacity remains tight AchalAnalyst,Kumar*Global Transport

HSBC Securities and Capital Markets (India) Private

◆ For Q1, we forecast INR11.8bn PBT at Indigo and INR6bn LBT Limited achalkumar@hsbc.co.in

at SJET; fares could stay high as fuel risk remains +91 80 4555 2751

Harshit Mantri*, CFA

◆ Adjust TPs; retain Buy on Indigo and Reduce on SJET (yet to Analyst, Transport & Logistics, Hospitality

report Q4FY26); potential consolidation in smaller airlines HSBCLimitedSecurities and Capital Markets (India) Private

harshit.mantri@hsbc.co.in

+91 80 4550 3780

Q1FY27 preview: While Q1 trading faced strong headwinds from high fuel prices and

weak FX, they have eased now with the jet fuel price declining by >50% from the recent * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

peak and INR appreciating against USD from INR94.67/USD to INR94.61/USD. not registered/ qualified pursuant to FINRA regulations

However, fares have risen sharply. At Q4FY26, Indigo guided for a mid-teen increase in

its Q1 pax revenue per ASK, but our fare tracker suggests almost high teens YoY

increase in PRASK in Q1. Yet, demand has been broadly resilient.

Fuel risk remains; airport costs could also rise: While the fuel price has come down,

we think the government may ask airlines to continue to pay higher fuel prices to recover

the Apr-May loss incurred by the Oil Marketing Companies (OMCs), when airlines paid

lower fuel prices, as the airlines have not signed up to the government’s fuel price cap

offer.