IndiGo may raise fares as fuel costs soar: CEO

IndiGo may raise airfares to offset a sharp increase in fuel costs, with CEO Willie Walsh saying the airline has limited room for further cost-cutting despite efforts to contain expenses."We have no choice but to look to increase fares to offset very significant rise in fuel bill," Walsh said, signalling that higher operating costs could translate into more expensive tickets for passengers.Also Read: IndiGo Q2 Results: Loss narrows YoY to Rs 1,879 crore; revenue rises 26%The country's largest airline will also review its network and capacity plans to limit the impact of elevated fuel prices, while continuing to explore ways to trim expenses. However, Walsh cautioned against expecting major cost reductions, citing the airline's already efficient cost structure."We will continue to look at measures to trim expenses but should not expect any significant cost measures," he said.IndiGo's comments come after it reported a net loss of Rs 1,879.1 crore for the September quarter, as a steep increase in aviation fuel expenses and rupee depreciation weighed on profitability. The airline's fuel bill surged 67.2% year on year to Rs 9,966.8 crore during the quarter.Also Read: Guwahati-Bangkok direct flights begin; IndiGo to operate services twice a week from October 31Walsh said IndiGo's cost base and financial position offered some flexibility in navigating the challenging operating environment."IndiGo has very efficient cost base, strong liquidity that gives us lot of options," he said.The airline also expects oil prices to remain elevated through the rest of the year, making fuel expenses a key concern for its operations and financial performance.Capacity and network under reviewIndiGo will assess its network and capacity plans to manage the pressure from higher fuel costs. The airline had already reduced capacity by 1% to 40.8 billion available seat kilometres (ASKs) in the September quarter, while the number of passengers carried declined 4.7% to 27.5 million.For the December quarter, the airline expects capacity, measured in ASKs, to grow in the early single digits compared with the year-ago period.Walsh said the airline could also participate in the Indian government's fuel price stabilisation fund, although no further details were provided.The CEO added that there was no change in the timeline for introducing widebody aircraft, indicating that the airline's longer-term fleet plans remain intact despite the near-term cost pressures.Fuel costs squeeze profitabilityIndiGo's parent, InterGlobe Aviation, reported total income of Rs 24,311.9 crore in the September quarter, up from Rs 19,599.5 crore a year earlier. Total expenses, however, climbed to Rs 26,188.4 crore.The airline's loss narrowed from Rs 2,582.1 crore in the year-ago quarter, but exceptionally high fuel costs and the depreciation of the rupee continued to weigh on its bottom line."We responded with prudent capacity reduction and yield management, supporting strong revenue performance but only partially offsetting the higher costs. Despite these actions, the quarter resulted in a net loss of around 19 billion rupees," Walsh said in a statement following the results.He said IndiGo remained focused on managing near-term challenges while continuing to invest in its future growth."India's long-term aviation opportunity remains compelling, and our priorities remain clear: safe and reliable operations, rigorous cost discipline, and disciplined growth that creates sustainable value," he said.Shares of InterGlobe Aviation, IndiGo's parent company, closed 0.32% lower at Rs 4,675 on the NSE on Thursday.