Along with cancellations, IndiGo’s operational troubles have spread to its on-time performance (OTP), which plummeted to 8.5 per cent on Thursday, down from 19.7 per cent and 35 per cent in the previous two days. OTP is a key measure of flight punctuality, and IndiGo’s figure is usually in the high 80 per cent range, which is a matter of pride for the aviation giant. The net loss to consumers due to the flight disruptions will be significant.
Surge pricing costs: 1,000 flights were cancelled just on Friday. Assuming each flight carries around 160 passengers on average, this results in 1,60,000 passengers stranded. Some would have abandoned their trip, while others would have rebooked their flight at a premium, increasing their outflow.
Many would have cancelled their trips, which would crystallise all the sunk costs – further travel tickets, lost hotel bookings, missed events, etc. Delays of six to eight hours also lead to huge productivity losses.
These are purely the tangible financial costs, without accounting for the emotional turmoil that people have experienced. A missed wedding of a close family member, a lost job interview, a desperately needed vacation, the uncertainty tax that people pay (the lack of information – is it delayed by an hour or two or four, or is it cancelled?), missed client meetings and lost billable hours, and other incalculable sufferings of passengers make this episode truly horrendous.
How did the most efficient airline, and the biggest player in the Indian market, err in such a manner? How can a company that runs 2,000-plus flights a day make such a miscalculation? IndiGo’s initial statements attributed this chaos to a perfect storm of compliance with the new pilot safety rules, weather, congestion, and technical glitches. While these may seem like compounding factors, allowing a large airline to cite minor weather changes, vague technical glitches, and higher demand as the reasons for such an enormous mess is unthinkable. The main reason is the new Flight Duty Time Limitations (FDTL) rules.
The story begins with pilot associations filing petitions in the Delhi High Court around 2019-20, pushing for stricter rules regarding pilot fatigue. The High Court repeatedly questioned India’s Directorate General of Civil Aviation about updating its rules on pilot fatigue and, in response, the DGCA unleashed the FDTL rules. It is a topic for a separate essay whether this form of judicial activism is merited, and yet another on why a government regulator should mandate working hours for pilots.
Regardless, FDTL is a set of safety regulations that determines how long a pilot can work, how much rest they must get, and how many night flights they can operate. Think of it as “labour laws for aviation safety”. These rules were notified in January 2024 and were to come into full effect on November 1, 2025. IndiGo has now admitted that it did not plan adequately for these changes and thus faced pilot and crew shortages, which have led to this mayhem.
It strains credulity that the dominant market leader failed to plan for such a foreseeable outcome, particularly given a lead time exceeding 12 months. Unless one is tempted to give in to alternative explanations. Providing exemptions to IndiGo is a horrible outcome that rewards this errant behaviour. There must be proportionate repercussions.
In advanced economies, the repercussions would be through the markets and the courts. The markets are the first recourse – customers would punish the airline by choosing alternatives, and the company would have to go out of its way to win back market share. The problem, however, is the lack of alternatives in India, which was one of the main causes of such a scenario in the first place. IndiGo commands about 65 per cent of the market share, which translates to roughly two out of every three domestic flyers in India being on IndiGo on an average day, with the rest of the industry effectively competing for the remaining third. This enormous market power means that customers, despite themselves, might have to choose IndiGo again for their travel needs due to the lack of options. The government needs to allow foreign airlines to operate domestic routes in India to ensure better competition.
The second recourse, which is almost non-existent in India, is filing class-action lawsuits against companies for such wilful negligence. While we often look disparagingly at the extremes of litigation and lawsuits in the US court system, it does keep even powerful entities in check. Outside of the markets, the threat of a multi-million-dollar lawsuit, where the airline is forced to pay substantial compensatory and punitive damages (not just amounts equivalent to the measly ticket prices), would have ensured proper planning and effective risk management.
The laws in India create a system that either prohibits or disincentivises class actions. Companies respond to incentives, and money is the most powerful one out there. In cases such as this, at least, it is time we got litigious.
The writer is a Professor of Economics at the Takshashila Institution and an affected party due to a cancelled flight
Providing exemptions to IndiGo is a horrible outcome that rewards this errant behaviour. There must be proportionate repercussions. 
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