India’s Aviation Watchdog Deploys Monitors to IndiGo Offices
TL;DR
India's aviation regulator DGCA deployed on-site teams at IndiGo's corporate office to monitor operations after massive flight cancellations. The airline faces scrutiny for crew shortages and must compensate passengers while rivals plan to expand services.
Key Takeaways
- •DGCA deployed two on-site teams at IndiGo's corporate office to monitor crew strength, cancellations, and passenger compensation after over 3,000 flight cancellations.
- •IndiGo faces criticism for failing to handle new pilot rest rules, leading to crew shortages and widespread passenger disruptions, with the Delhi High Court ordering compensation.
- •Rival airlines like Air India and SpiceJet are planning to increase flight offerings to capitalize on IndiGo's reduced capacity and market share challenges.
- •DGCA has demanded a detailed plan from IndiGo's executives on pilot hiring and operational restoration, with potential penalties for poor planning.
- •The aviation ministry may roll back fare caps to encourage competition as IndiGo stabilizes operations, affecting market dynamics.
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India’s aviation regulator, in an unprecedented move, deployed two on-site teams at IndiGo’s corporate office to monitor operations at India’s largest carrier, which canceled over 3,000 flights last week and caused massive air disruption.
These teams are required to give daily reports 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 utilization, fleet size, routes affected due to crew shortage and standby crew, while the second team will monitor the status of cancellations, on-time performance, refunds and baggage returns to fliers, the letter said.
The latest missive by DGCA follows a show-cause notice it issued Saturday to IndiGo’s Chief Executive Officer Pieter Elbers demanding an explanation for the fiasco and an order on Tuesday to cut 10% of its flight routes. The sector giant has nearly two-thirds of local market share, which was partly the reason its cancellations hobbled the country’s air travel.
Later Wednesday, the company lowered its third-quarter guidance for both capacity and passenger unit revenue. The overall financial impact of the crisis can’t be quantified at this stage, according to a statement.
Read More: IndiGo Crisis Shows Perils of India’s Corporate Dominance
The Delhi High Court, while hearing a public interest litigation on this, on Wednesday said that Indigo was expected to compensate the stranded passengers but didn’t specify any monetary sum. “Start making compensations,” the two-judge bench said. “Compensation not only with respect to cancellations but also for the agony caused to the passengers.
The court also questioned the government lawyer, Chetan Sharma, on how the administration “allowed this situation to precipitate” as well as what powers it had to take action.
Cockpit Shortage
IndiGo is facing intense scrutiny — and widespread criticism — for the mass flight cancellations that left thousands of passengers stranded after the airline failed to adequately handle new pilot rest rules, creating a cockpit crew shortage.
The Indian government relaxed the pilot rest rules to allow the airline to stabilize but has spoken of penalizing it for failing to plan for a policy change that was known since January 2024.
Other airlines ultimately “fell in line” when the new pilot duty norms kicked in but Indigo “hit an air pocket due to their own ineptitude,” Sharma said in court, adding that the airline has “apologized profusely” in its response to the show-cause notice.
Read More: How Profit Pursuit Led to India’s Top Airline Unraveling
The DGCA has also asked CEO Elbers and all top IndiGo executives to come for a meeting on Thursday with a detailed plan on hiring of pilots and restoration of operations, according to people familiar with the matter, who did not want to be cited on private conversations.
The airline said earlier this week that it needs more time to complete a root-cause analysis on what went wrong. It has said that other operational challenges such as technology glitches, winter schedule changes, adverse weather conditions and minor congestion compounded the crisis further.
Rivals Circling
IndiGo’s rivals, meanwhile, are swooping in at the opportunity to take a bite out of its nearly 66% market share.
The other carriers, which include Tata Group’s Air India, SpiceJet Ltd. and Akasa Air, are going to share a plan with DGCA on how they can step up their flight offerings now that IndiGo has been forced to cut back, the people 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 looking at increasing the utilization of its wet- and damp-leased planes, they added. Wet leases in aviation refer to hiring of a plane complete with crew and pilots.
IndiGo, Air India, SpiceJet, DGCA and India’s aviation ministry did not immediately respond to an email seeking comments.
SpiceJet has already announced plans to introduce as many as 100 additional daily flights during the current winter schedule, pending regulatory approvals.
With IndiGo operations stabilizing, India’s aviation ministry is also considering rolling back its order on fare caps and may do it within a week, people said, luring the rival carriers to add more flights.