Synopsis
Spirit Airlines' closure and soaring jet fuel costs pose challenges for Indian IT services firm Coforge. Analysts warn of wider implications for the Indian IT sector as airlines face financial distress. Coforge, with a significant travel portfolio, is closely watched. The ongoing geopolitical situation and fuel crisis could lead to further airline bankruptcies, impacting IT service providers.Listen to this article in summarized format
Jet fuel prices have surged following the US-Israel war on Iran, leaving airlines with billions of dollars in additional costs. Spirit had filed for bankruptcy in August 2025, after an earlier filing in November 2024, and is now being liquidated after failing to secure creditor support for a US government bailout.
“Among Indian IT, Coforge is the major player. It is a couple of million dollars in billing per quarter,” a source with knowledge of the matter told ET.
Another person aware of Coforge’s engagement with Spirit said the company had taken steps to mitigate the impact of the bankruptcy, but the shutdown means the client relationship would never return.
“Airlines go in and out of bankruptcy all the time but this is a shutdown. That deal will never come back. And it is going to become a bigger problem because every airline is struggling due to jet fuel prices and Coforge is heavily focused on airlines,” the second source said.
In response to ET’s queries, Coforge said there was “no impact of the closure of Spirit Airlines on our operations or projections and that Spirit would be less than 0.1% of FY27 revenue”.
“The travel portfolio of Coforge remains in line with what we have shared with investors earlier. We continue to see the travel portfolio growing very robustly in FY27 and beyond given the long-term One Order-One Offer industry wide initiative and also the AI-related investments in revenue maximisation, disruption management and ancillary revenue expansion initiatives,” Coforge said in a statement.
Coforge derives about 22% of its revenue from the travel, transportation and hospitality segment. In contrast, mid-tier rival Hexaware gets about 8% of its revenue from travel and transportation. Larger IT firms such as Tata Consultancy Services, Infosys and Wipro also serve airlines, but the segment contributes a smaller share of their revenue.
“Airlines and travel have been one of the fastest-growing sectors after the pandemic for Indian IT service providers,” said Pareekh Jain, CEO of Pareekh Consulting. “The current Iran crisis is impacting ATF prices, and all airlines are in distress, cutting on their opex and capex, including reducing flights. This will impact airlines' business of leading IT service providers, including Coforge, TCS, Infosys, Wipro, etc. Service providers need to be watchful for more bankruptcies if the Iran war and fuel crisis prolongs.”
