WillieWalsh Archives - Corporate Updates

Airfares in India could remain under pressure as airlines struggle with record-high jet fuel prices, IndiGo chief executive Willie Walsh has warned. The airline is absorbing as much of the increase as possible, but rising operating costs may leave it with little choice but to pass some of the burden on to passengers.

Walsh made the remarks during his first in-person interaction with the media since taking charge as IndiGo CEO in August. Speaking in New Delhi on Monday, November 2, he described a difficult environment for airlines, with aviation turbine fuel (ATF), airport charges and taxes weighing on finances.

Fuel accounts for around 40 per cent of IndiGo’s operating costs, compared with roughly 32 per cent for the global airline industry. Walsh said jet fuel prices were at record levels and could remain elevated in the near term, even though crude oil prices were not at historic highs.

He pointed to the unusually wide gap between crude oil and refined jet fuel prices. This difference, known as the crack spread, has increased sharply. According to Walsh, its average level between 2000 and 2025 was about 22 per cent, but it has now climbed to around 65 per cent.

The increase reflects disruption to global refining capacity, particularly in Europe and the Middle East, restricting aviation fuel supplies. Walsh said crude oil production was beginning to recover, but jet fuel output had not risen at the same pace. This imbalance has kept fuel unusually expensive.

The pressure is visible in IndiGo’s financial results. Its fuel bill rose 67.2 per cent year-on-year to Rs 9,966.8 crore in the July-September quarter. Parent company InterGlobe Aviation reported a consolidated net loss of Rs 1,879.1 crore, lower than a year earlier. Revenue increased 26 per cent to Rs 23,364 crore.

Walsh said IndiGo had limited room for further significant cost reductions because it already operated with an efficient cost base. The airline has adjusted capacity and fares to soften the impact, but these steps have not fully offset higher fuel expenses.

Higher fares have affected demand. IndiGo carried 27.5 million passengers in the September quarter, down 4.7 per cent from a year earlier. Walsh said its average seat factor fell by around two percentage points. However, bookings for the December quarter remained robust and the outlook was positive.

He expects the impact of higher ticket prices on passenger demand to be temporary. Airlines, he said, must balance affordable fares with financial stability. IndiGo is absorbing a significant share of the higher fuel bill, but cannot shield passengers from every increase indefinitely.

Walsh also called for lower taxes and airport charges, arguing that these costs make India an expensive market for airlines. He said airports should offer more competitive pricing because they effectively function as monopolies. Lower levies, he added, would help the aviation market grow and support investment.

Fuel hedging is another issue under review. IndiGo has traditionally avoided locking in fuel prices through financial contracts. Walsh said the airline’s board had discussed the policy and that a comprehensive review would be undertaken. He stressed that hedging was about managing risk, not betting on future prices. No decision has been taken.

The airline is also dealing with operational challenges caused by geopolitical developments. Walsh said the continued closure of Pakistani airspace remained a concern for Indian carriers. IndiGo has reduced some services to Saudi Arabia amid the situation in West Asia, with passenger and crew safety remaining its priority.

Despite the immediate pressures, Walsh said IndiGo’s long-term growth plans were unchanged. The airline expects its first Airbus A350 wide-body aircraft in the second half of 2028, supporting expansion of long-haul international services and its premium offering. It is also assessing opportunities at Navi Mumbai International Airport.

IndiGo is also expanding its longer-range narrow-body network, with four A321XLR aircraft in operation and plans to increase the number to seven by March 2027 for international routes.

Walsh said IndiGo continued to see significant opportunities in India and would focus on maintaining a competitive cost base. The airline currently operates more than 2,100 flights a day and has a fleet of over 400 aircraft.

For passengers, the immediate concern is whether higher fuel expenses will translate into more expensive tickets. Walsh’s comments suggest further fare increases remain possible if costs stay elevated. The airline hopes refining supply will improve and fuel premiums will ease, but there is no clear indication of when relief will arrive. Until then, carriers must balance ticket prices, passenger demand and financial performance.

IndiGo’s new chief executive officer Willie Walsh has made it clear that the airline will not slow down its global ambitions despite the difficult environment facing the aviation industry. In his first address to employees after taking charge, Walsh said IndiGo must remain focused on international expansion while responding carefully to airspace disruptions, supply chain constraints, rising costs and changing global conditions.

Walsh took charge as IndiGo CEO on Monday, just days after completing his tenure as director general of the International Air Transport Association (IATA). His arrival comes at an important point for India’s largest airline, which is celebrating 20 years of operations while simultaneously dealing with financial pressure, international route disruptions and the need to rebuild confidence following last year’s operational crisis.

Speaking at IndiGo’s 20th anniversary town hall, Walsh struck an optimistic tone. He told employees that the airline’s biggest opportunities were still ahead and that new aircraft and an expanding international network could help connect India with more destinations around the world.

For Walsh, the opportunity is closely linked to India’s growing aviation market. He sees the country’s rising demand for air travel and its geographical position as important advantages that could help India develop into a major global aviation hub.

That ambition, however, comes with several immediate challenges.

IndiGo’s international operations have been affected by disruptions in the Middle East and Europe. Changes in airspace availability have forced airlines to alter routes and schedules, while geopolitical uncertainty has made international operations more expensive and complicated.

The airline has also decided to end its current wide-body operations from October 25, 2026, and complete its damp lease arrangement with Norse Atlantic Airways by October 31. The decisions come amid airspace restrictions, higher fuel costs and currency pressures. The move highlights the difficult balance IndiGo faces between pursuing long-haul international growth and protecting its finances in the short term.

Fuel costs are another major concern. Aviation turbine fuel, or ATF, normally represents one of the biggest expenses for an airline, accounting for roughly 35-40% of operating costs. IndiGo’s fuel bill jumped more than 84% in the first quarter of FY27, contributing to an unexpected loss.

The weaker Indian rupee has added another layer of pressure. Many airline expenses, including aircraft leases and maintenance costs, are linked to the US dollar. A weaker rupee therefore increases the cost of running the airline and can directly affect profitability.

Walsh is stepping into the role after a particularly difficult period for IndiGo. Former CEO Pieter Elbers resigned in March following the airline’s operational problems. The crisis had caused a sharp fall in IndiGo’s domestic market share, which dropped from 63.6% in November 2025 to 59.6% in December.

The airline has since recovered strongly. Its domestic market share climbed back to 66.3% in June, underlining the strength of its core business even as international operations remain more challenging.

Financially, however, the pressure remains significant. IndiGo reported a loss of ₹2,394 crore in FY26, compared with a profit in the previous financial year. The result reflects the impact of operational disruptions, higher fuel costs and other pressures affecting the airline industry.

Walsh brings extensive international aviation experience to the job. Before joining IndiGo, he served as IATA’s director general and previously led British Airways, Aer Lingus and International Airlines Group. His experience of managing large airline operations is expected to be particularly useful as IndiGo tries to strengthen its international network without compromising the efficiency that built its domestic success.

In his first message, Walsh also reminded employees that running an airline successfully is extremely difficult. He pointed out that 408 airlines had failed over the previous decade, making IndiGo’s two-decade journey particularly significant.

His message was not simply about expansion. Walsh emphasised discipline, teamwork and consistency as the foundations of a successful airline. He also said he wanted IndiGo to become the carrier of choice for travellers, building on the customer trust and operational reputation the airline has developed over the years.

That focus on the customer could prove important as competition in Indian aviation intensifies. Air India and the broader Tata group are expanding their international presence, while Indian travellers have more choices than ever before.

Walsh has also signalled that he intends to understand the airline from the ground up. He plans to visit airports, engineering facilities and offices in the coming months and meet employees across the organisation. His approach suggests that operational improvement will be as important as network expansion.

The timing is significant. IndiGo has already established itself as India’s dominant domestic airline. The next stage is more complicated: turning that domestic scale into a sustainable international presence while managing fuel prices, currency movements, aircraft availability, geopolitical risks and customer expectations.