IndiGo’s operational meltdown early December hit the carrier’s October-December bottomline, with India’s largest airline taking a one-time hit of Rs 577 crore on account of the network-wide disruption that marked its worst crisis in nearly two decades of its operations. Along with this, another exceptional item—a Rs 969-crore provision for increase in social security benefits due to implementation of the new labour codes—meant that the airline’s December quarter consolidated net profit nosedived 78% year-on-year to Rs 549 crore from Rs 2,449 crore, even as the operating profit was nearly flat.
The Rs 577-crore exceptional loss on account of the meltdown includes Rs 555 crore provisioned as operational disruption-related costs like passenger compensation as per regulatory guidelines, travel voucher issuances to most-affected passengers, and other associated costs. Another Rs 22 crore have been provisioned for the financial penalty imposed on the airline by aviation regulator Directorate General of Civil Aviation (DGCA).
On January 17, the DGCA slapped IndiGo with financial penalties totalling Rs 22.20 crore for the massive disruption in the carrier’s operations that led to over 2,500 flight cancellations and around 1,850 flight delays in the December 3-5 period. The airline was ordered to pledge a bank guarantee of Rs 50 crore in favour of the DGCA; it will be released by the regulator in phases after IndiGo implements measures to ensure compliance with DGCA directives and long-term systemic correction.
The DGCA has also issued warnings to some senior management personnel of IndiGo, including CEO Pieter Elbers and COO Isidre Porqueras, for the disruption that was primarily caused by the airline’s inadequate preparedness for the implementation of revised pilot rest and duty duration rules. The DGCA has directed the airline to relieve Jason Herter, senior vice president of IndiGo’s operations control centre (OCC), of current operational responsibilities. The cumulative fine of Rs 22.20 crore is the highest-ever regulatory penalty imposed by the DGCA on an airline, and is slightly higher than IndiGo’s average daily net profit for financial year 2024-25.
Elbers said Thursday that the airline’s board is evaluating the DGCA directions, and reiterated that airline’s management and board are committed to taking full cognizance of the orders.
The enforcement actions by the regulator are based on the findings of a four-member DGCA inquiry committee, which concluded that the primary causes for the disruption were over-optimisation of operations, inadequate preparedness along with deficiencies in system software support for the revised Flight Duty Time Limitation (FDTL) provisions, and shortcomings in IndiGo’s management structure and operational control.
The airline is doing its own root-cause analysis, for which it has engaged an international aviation expert. “When it comes to have a proper evaluation of what happened, there are many factors which have come into play, and we’ve shared earlier that this has been a compounding effect of multiple factors, so clearly we are identifying what are these factors, to what extent have they contributed, and how to address these going forward. So, this is an ongoing process,” Elbers said.
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Having recovered from the crisis, IndiGo expects its seat capacity to increase by 10% in the March quarter as compared to the corresponding period of the last financial year, predominantly driven by more international flights. The airline’s approved domestic schedule is already curtailed by 10%. It was done by the DGCA last month during the disruption, and is expected to be in place for the entirety of the Winter Schedule, which ends late March. IndiGo is currently operating over 2,200 flights—around 1,900 domestic and the rest international—down from 2,300-plus flights.
Elbers said that with the curtailed schedule, IndiGo is handing back unused airport slots. Meanwhile, the Ministry of Civil Aviation (MoCA) on Thursday asked other airlines to submit their requests for slots vacated by IndiGo. A slot coordination committee constituted by MoCA will consider the requests and finalise the redistribution of these slots. According to sources, preference would be given to carriers that can demonstrate available capacity to use the additional slots without discontinuing their existing routes, as per sources.
Earlier this week, IndiGo assured the DGCA that it will have sufficient pilot availability to maintain its current level of flight operations beyond February 1o, when the specific pilot duty and rest duration rules-related exemptions granted to the airline are set to expire. IndiGo informed the DGCA that it will have 2,400 captains available for its Airbus A320 fleet, against a requirement of 2,280 to maintain stable operations as per its current flight schedule after February 10. As for first officers, the airline will have 2,240 available, against a requirement of 2,050, it informed the DGCA. During the crisis last month, IndiGo had informed the regulator that it was short by 65 A320 captains to maintain its schedule as per the new FDTL rules, even though it had first officers in sufficient numbers.
“…full focus has been on restoring the operations, coming back to the normalcy and stability in the operation, and prepare for the transition, which is taking place in February,” Elbers said Thursday.
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In view of the scale of disruption faced by IndiGo, the DGCA had exempted it from the new definition of night as well as the two-landing per crew cap for operations encroaching night till February 10, bringing huge relief, although temporary, to the carrier.
IndiGo accounts for a lion’s share of domestic flights that land or depart between midnight and 6 am, the new definition of ‘night’ in the revised FDTL rules; the earlier definition was midnight to 5 am. Among other changes, the new rules capped the number of landings for pilots operating flights encroaching upon any part of this six-hour period at two, down from six earlier. This meant that pilots operating any so-called red-eye flight landing or departing in the 12-6 am period could only operate one more flight—before or after the said flight—in their entire duty shift for that day. This had hit IndiGo the hardest.
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