When the King of Skies Encounters Turbulence

The Turbulence that transpired at Indigo

While other airlines struggled to keep their heads above water, InterGlobe Aviation Ltd (IndiGo)  cracked the code in the Indian aviation market, commanding more than 60% market share. The low-cost carrier, which operates more than 2,300+ flights daily across 135+ destinations, encountered challenges in pilot roster management under the new DGCA Flight Duty Time Limitations (FDTL) rules, which unfolded into a full-blown crisis, leading to the cancellation and delay of thousands of flights over a span of two weeks.

Root Cause: India’s aviation regulator (DGCA) introduced stricter Flight Duty Time Limitation (FDTL) rules in January 2024 to combat pilot fatigue, requiring more rest periods and limiting night landings. The rules were phased in from July 2024, with full implementation by November 1, 2024.

IndiGo’s Failure: Despite nearly 18 months to prepare, IndiGo allegedly failed to make timely roster adjustments, implemented a hiring freeze for pilots, and increased flight departures by about 10% compared to the previous year. The airline needed 2,422 captains but only had 2,357, creating a critical shortage.

How it unfolded?

December 03, 2025: More than 150 IndiGo flights were cancelled with dozens other delayed as the company faced “a multitude of unforeseen operational challenges including minor technology glitches, schedule changes linked to the winter season, adverse weather conditions, increased congestion in the aviation system and the implementation of updated crew rostering rules (Flight Duty Time Limitations)” as per its press release.

Initially, the company indicated that it had calibrated adjustments to its schedule to address these operational challenges and indicated that it would keep in place these measures for another 48 hours, to allow its operations to normalise.

December 04, 2025: DGCA sought certain information in the  matter and the company was in the process of providing the same.

December 05, 2025: IndiGo witnessed its worst day of the crisis till date with more than 1,000 flights cancelled which is more than half of its daily flights. The company acknowledged that it would take somewhere between 10-15 December for normalcy to resume.

The DGCA granted a one-time exemption from specific requirements of the new flight duty time limitation (FDTL) rules for pilots at IndiGo until Feb. 10, 2026. The exemption has been granted solely to facilitate operational stabilisation and does not amount to dilution of safety requirements, the regulator said in a statement.

December 06, 2025: Following the company’s efforts to stabilize schedules and reduce delays, daily flight cancellations dropped to fewer than 850. Daily flight operations resumed to 1,500 flights as compared to 700 flights on the previous day with 30% on-time performance (OTP).

December 07, 2025: IndiGo’s board formed a Crisis Management Group (CRG) to continuously monitor the issue and restore normal operations. IndiGo operated 1,650 flights on the day, achieving a 75% OTP.

December 08, 2025: IndiGo operated 1,800 flights with 90% OTP.

December 09, 2025: The company announced the restoration of all flights published on its network with an adjusted schedule. The company operated ~1,900 flights connecting all 138 destinations in its network, with OTP back to normal levels.

IndiGo received a notice from DGCA, directing a revised 10% reduction (from initial 5%) in the domestic winter schedule 2025 across all sectors.

December 10, 2025: IndiGo confirmed the cancellation of approximately 4,500 flights in the previous week, resulting in revenue losses and affecting its prior guidance for H2FY26.

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(Source: Company, HDFC sec)

December 11, 2025: IndiGo announced travel vouchers worth Rs 10,000 for severely impacted customers in the government-mandated compensation of Rs 5,000-10,000 for customers whose flights were cancelled within 24 hours of departure time.

December 12, 2025: The Board appointed Chief Aviation Advisors LLC, led by Captain John Illson, veteran Aviation Expert, to conduct an independent expert review and assessment of the operational disruption and the contributing factors, near normalcy with 2,050 flights operated on the day.

Could it have been avoided?

India’s market leader IndiGo is a fabled tale of razor-sharp cost discipline, a steady asset-light business model and consistent on-time performances, carrying millions of Indians across the country and all over the world, week after week. The company has over the years demonstrated its ability to successfully navigate the complexities of Indian aviation market and has not only survived but thrived financially in a highly competitive and regulated sector.

In what would become one of the biggest weeks in operational challenges for the company, it seemed to have been hit by a confluence of regulatory and technical headwinds. In what started as a technical glitch following an emergency software patch installed on the Airbus A320 fleet over the November 29-30 weekend turned into a full-blown crisis as the company seemed to be unprepared for the second phase of FDTL regulations that mandated 48 hours of consecutive rest for pilots, up from previously 36.

While the regulator DGCA’s move was not sudden and was necessary to combat pilot fatigue, the new regulations appear harsher than global standards and lack an understanding of the on-the-ground realities of aviation companies’ preparedness and willingness to comply. On the other hand, IndiGo also faltered through its lack of hiring and personnel management, which resulted in an unsurprising regulatory change, resulting in a significant loss of revenue for the company.

The primary cause for such a crisis seems to be a mixture of the company’s mismanagement or pushing the boundaries of regulatory requirements and the regulator’s push for norms without understanding the ground reality.

Where do we go from here?

While the regulator seems to have caved in for now, extending the relaxations till February 2026, IndiGo is still at an impasse with the DGCA, and whether a middle ground is reached in the meantime needs to be seen. In terms of financial impact, the mass flight cancellations, refunds and compensations to impacted customers and the directive for 10% reduction in operations is expected to result in a high-single digit impact on ASKs and mid to high single digit impact on PRASK in the ongoing quarter. While the operations for the company have reached near normalcy for now, whether the 10% reduction in winter capacity will continue in Q4FY26 and beyond remains a key overhang.

IndiGo and the broader Indian aviation sector remain structurally strong, supported by robust domestic travel demand, favourable long-term air traffic growth, IndiGo’s scale and cost leadership, disciplined capacity addition, and improving infrastructure and policy support despite near-term operational turbulence.

 Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.

Source : HDFC Securities Prime Research

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