India’s aviation regulator, the Directorate General of Civil Aviation (DGCA), has ordered IndiGo to cut its flight schedules by 10% after large-scale disruptions since 1 December, Hindu Businessline reports. The directive will cut some 220 daily flights across sectors, particularly on high-demand and high-frequency routes.

Behind the chaos: The schedule cut comes after poor planning for new pilot rest rules led to at least 2k flight cancellations this month, leaving thousands of passengers stranded and fuelling public anger, Reuters reports. IndiGo, which controls about 65% of India’s domestic aviation market, has acknowledged that it failed to plan adequately for a 1 November deadline to implement stricter rules on night flying and weekly rest for pilots.

The cost: IndiGo’s shares are down almost 17% from their pre-crisis peak in late November, wiping about USD 4.3 bn from its market cap. Its shares were down 8.3% on Monday alone, but have gained 1.3% in early trading today. Shares of rival SpiceJet are up 13.9% in the same period.

Concentration risk: IndiGo operates roughly 950 of India’s 1.2k domestic routes and has no direct competitor on 63% of them, limiting options for passengers and amplifying disruption across the ecosystem.

GCC flights: Passengers along the India-UAE routes faced up to 10-hour delays during last week’s disruptions, according to Khaleej Times. IndiGo runs flights along 44 international destinations, including all GCC countries. It operates 111 flights per week connecting Abu Dhabi with 16 Indian cities and 108 flights a week to Dubai from 13 Indian cities, according to The National and a company statement.

What took IndiGo to chaos?

Duopoly exacerbates risks: “India’s airline industry has become dominated by two players and the system becomes extremely vulnerable to a shock at either player,” aviation analyst and former network planner Ameya Joshi told EnterpriseAM. A large disruption at the dominant carrier doesn’t just inconvenience fliers, it ripples through airport infrastructure, air-traffic control capacity, and fares because there aren’t enough alternative seats in the market to absorb displaced demand, Joshi noted.

Where IndiGo went wrong: The company has expanded its fleet and routes faster than it invested in its pilot pipeline, crew training, and rostering capacity. “What we’re seeing is less an isolated failure and more a symptom of scaling faster than systems and talent can realistically support,” Joshi told us.

What does it mean for the industry? The crisis has renewed attention on how safety rules intersect with operational intensity and financial pressure in India’s fast-growing aviation sector. The DGCA last week granted IndiGo a one-time exemption from the revised duty-time limits and rolled back a rule that prevented airlines from counting pilot leave as weekly rest.

Fatigue rules are not optional overheads, they can damage credibility. “There will be pressure to clarify how far safety rules can be flexed in a crisis before credibility is damaged,” Joshi warned.

What’s next? The 10% cut applies for the duration of the winter schedule while IndiGo reworks crew deployment. India’s civil aviation ministry and the airline have yet to provide a timeline for full operational stabilization.

OUR TAKE-

The recent disruptions expose a wider structural imbalance in an Indian aviation sector dominated by a near duopoly of IndiGo and the Tata-owned Air India group, together controlling over 90% of the domestic market.

Foreign airlines including Emirates have demanded more access to the market to cater to surging travel demand, according to Economic Times. “For more than a decade, the Indian government has effectively acted as a brake on expanding air service capacity between the UAE and India, primarily to protect the commercial interests of Air India and IndiGo,” a source privy to these conversations told EnterpriseAM.

While this approach may support domestic carriers in the short term, the broader consequence has been significant harm to Indian consumers and the international travelling public, the source added.

Will the government step in? The episode suggests government intervention to break the duopoly may be in order. More competition would shield consumers from disruptions while also bolstering affordability as upwardly-mobile Indians increasingly opt for air travel, fulfilling Prime Minister Modi’s dream of “bringing those wearing slippers into airplanes.”

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