India’s aviation watchdog deploys monitors to oversee IndiGo as rivals swoop in

MUMBAI – India’s aviation regulator has deployed two on-site teams at IndiGo’s corporate office to monitor operations in an unprecedented move, after the nation’s largest carrier sparked

massive travel disruption last week by cancelling more than 3,000 flights.

 

The teams are required to report daily to the Directorate General of Civil Aviation, or DGCA, according to a letter sent to IndiGo and seen by Bloomberg News. A two-member team will look into IndiGo’s crew strength and utilisation, fleet size and routes affected by staff shortages, while the second team will monitor the status of cancellations, on-time performance, refunds and returning luggage to fliers, the letter said.

The latest move by the DGCA follows a show-cause notice it issued on Dec 6 to IndiGo chief executive Pieter Elbers demanding an explanation for the fiasco and an order on Dec 9 for the airline to cut 10 per cent of its flight routes. IndiGo controls almost 66 per cent of the country’s aviation market, and that dominance contributed to the travel chaos.  

The carrier lowered its third-quarter guidance late on Dec 10 for both capacity and passenger unit revenue. The overall financial impact of the crisis cannot yet be quantified, according to a statement. 

Separately, the Delhi High Court – while hearing a public interest litigation seeking refunds and support for affected passengers – said on Dec 10 that the airline would be expected to compensate stranded customers, though it did not specify by how much. 

The compensation should cover cancellations and also the “agony” caused to passengers, the two-judge bench said.

The court also questioned the government’s lawyer, Mr Chetan Sharma, on how the administration “allowed this situation” to occur, as well as what powers it had to take action.

IndiGo is facing intense scrutiny – and widespread criticism – for the mass cancellations that left tens of thousands of passengers stranded after the airline failed to adequately handle new pilot rest rules, creating a crew shortage. 

The government relaxed the pilot rest rules to allow the airline to stabilise operations, but has spoken of penalising it for failing to plan for the policy change that was flagged in January 2024.

Rivals circling

IndiGo’s rivals, meanwhile, are swooping on the opportunity to take a bite out of its stranglehold on the market.

Air India – owned 25 per cent by Singapore Airlines – SpiceJet and Akasa Air will share a plan with the DGCA on how they can step up their flight offerings now that IndiGo has been forced to cut back, people familiar with the matter said.

Air India and its low-cost unit Air India Express are looking at shifting capacity from low-traffic routes to high-demand metro routes, while no-frills carrier SpiceJet is considering increasing the utilisation of its wet- and damp-leased planes, they added. Wet leases in aviation refer to hiring of a plane complete with crew and pilots.

SpiceJet has already announced plans to add as many as 100 daily flights during its current winter schedule, pending regulatory approvals.

With IndiGo operations stabilising, India’s Aviation Ministry is also considering rolling back its order on pricing caps and may do so within a week, the people said, luring rival carriers to add more flights. BLOOMBERG