IndiGo's Q3 Profit Plunges 78% Due to New Labor Codes, Outweighing Flight Disruptions

• IndiGo's parent company, InterGlobe Aviation Ltd, reported a 78% year-on-year drop in net profit to ₹550 crore in Q3 FY25, despite a 6.2% revenue increase to ₹23,472 crore.
• The airline incurred an exceptional charge of ₹1,547 crore, with ₹969 crore directly attributed to the implementation of new labor codes, significantly more than the ₹577 crore from December flight disruptions.
• Gaurav M. Negi, IndiGo's CFO, confirmed a provision of approximately ₹970 crore for the new labor laws, impacting the company's financials.
• IndiGo's labor code impact was disproportionately higher compared to labor-intensive sectors like IT and banking, relative to its workforce size and wage bill.
• The new labor codes redefine wages, limiting allowances to 50% of total remuneration, which has forced companies to increase basic pay.

Why It Matters: New labor codes caused a massive ₹969 crore charge for IndiGo, severely impacting Q3 profit more than flight chaos.