IndiGo, India’s largest airline, is facing a significant operational crisis that has thrown the country’s aviation sector into turmoil. The airline has a 60% monopoly market share and flies more than 100 million passengers each year. Yet it’s been forced to ground more than half its fleet due to a lack of legally rested crew. IndiGo’s lack of foresight for new crew-rostering regulations is to blame for this shortage directly. Consequently, it has caused a ripple of mass cancellations of flights across key centers such as Delhi, Mumbai, Bengaluru, and Hyderabad.
In early December, IndiGo cancelled over 200 flights as it struggled to comply with the new rules introduced by India’s aviation regulator. Things took a decided turn for the worse on December 5 when about 1,600 flights were cancelled. The series of mishaps have raised questions both about the airline’s readiness to operate and its willingness to put safety first. Its on-time performance tanked — falling from 84% in October to just 68% in November.
As the largest airline in India with more than 2,000 daily flights, IndiGo’s expansion is key to building back that domestic and international travel. The regional airline took the expansion baton further, going on the aggressive offensive by opening up new Western Canada-based planned international routes. This strategy has contributed to the current crisis. Some analysts argue that in pursuit of such cost-cutting measures, IndiGo has prioritized crew welfare and safety.
The Directorate General of Civil Aviation (DGCA) has issued a show-cause notice to IndiGo for “significant lapses in planning and oversight.” The regulator has ordered the beleaguered airline to cut its flight plan by at least 5% amid the ongoing crisis. In his testimony, aviation expert Mark Martin emphasized just how serious this should be by asking how IndiGo could possibly operate like this.
“Did they do this because adopting the new rules would have required them to hire hundreds of new pilots and raised costs?” – Mark Martin
With almost six months’ warning to get ready for new regulations, IndiGo had no excuse for not taking action and yet… .Martin added,
“They had several months’ notice to implement the rules. All their competitors had complied. Why couldn’t IndiGo step up?”
This failure of proper planning and foresight has resulted in accusations that IndiGo chose the easy way to save money over the health of its pilots. An IndiGo pilot expressed concern over this issue, stating:
“Working overtime may be normal for some industries, but aviation is a highly safety-centric profession where fatigue is a silent killer. You don’t even know its effects until it’s too late.”
As all this played out, IndiGo’s stock price crashed on the Mumbai Stock Exchange. Investors are worried about higher costs due to disruptions to operations and new crew costs per the regulations. Moody’s, an international credit rating agency, warned that IndiGo could face substantial financial damage due to lost revenue from flight cancellations, refunds, and penalties imposed by the DGCA.
GR Gopinath, an aviation veteran, remarked on the implications of IndiGo’s dominant position in the market:
“For all practical purposes, the airline is now a monopoly. And what comes with monopolies is indifference.”
As the airline continues to look to the future, it does its best to reassure passengers and stakeholders alike. They are hoping for operations to stabilize before December 10 to December 15. Despite that praise, a lot of folks remain unconvinced that IndiGo can win back the public’s trust after this operational embarrassment.
As other airlines seek to capitalize on IndiGo’s misfortunes by targeting its passenger base, the airline faces not only operational challenges but potential long-term reputational damage.
“IndiGo has shot itself in the foot and caused irreparable damage to its brand.”
Ameya Joshi, another industry expert, emphasized the role of regulatory bodies during this crisis:
Moody’s concluded that IndiGo “lacked the resilience needed for this change in regulations,” indicating that without a system-wide reboot, such operational failures could continue to plague the airline.
“The country is looking up to the regulator and the ministry.”
Moody’s concluded that IndiGo “lacked the resilience needed for this change in regulations,” indicating that without a system-wide reboot, such operational failures could continue to plague the airline.