In today’s Finshots, we look back at the IndiGo crisis that broke out on the 2nd of December 2025 and try to understand whether regulators or the government can actually pull up the airline for intentionally or unintentionally bringing India’s skies to a standstill.

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Also, just so you know, this is one of those stories that’s going to be a bit longer than usual.

The Story

We know you’ve been waiting for us to write about the IndiGo crisis that has dominated headlines for nearly a week now. And honestly, there hasn’t been much to add beyond what you’ve already seen splashed across the news headlines in papers and on your screen.

But the more we watched the story unfold, the more we began looking at it from a different angle — not just what happened, but whether IndiGo could actually be held accountable in a way that matters.

You might’ve already heard the Civil Aviation Minister, K. Ram Mohan Naidu, say that the government plans to take strict action to set an example for the industry. These are strong words, sure.

But the real question is: can any of this genuinely hurt IndiGo and can it go beyond statements and actually sting the country’s biggest airline where it truly counts?

And here’s why we say that. If you step back and look at the whole thing, the chain of events is actually quite straightforward.

Back in January 2024, the DGCA (Directorate General of Civil Aviation), India’s aviation regulator, rolled out revised FDTL (Flight Duty Time Limitations) rules. These are the rules that decide how long pilots can be on duty, how many hours they can fly, how many night landings they can perform, and the minimum rest they must get. The changes were brought in to tackle rising concerns around pilot fatigue and to bring India closer to global safety standards.

The new framework tightened things quite a bit. Pilots now needed 48 consecutive hours of weekly rest (earlier, this was 36 hours). The definition of ‘night’ was stretched by an extra hour. Night landings were slashed from six to two. Airlines couldn’t roster pilots for more than two consecutive night duties. And on top of that, they had to make mandatory roster adjustments and file quarterly fatigue reports.

All of this naturally meant fewer flying hours for pilots and crew, which meant that airlines needed more people and smarter planning. The DGCA even gave everyone time to adjust by phasing the rules. They were first meant to be implemented by June 2024, then deferred to a gradual rollout starting July and wrapping up in November this year.

Most airlines took the hint and adapted. Air India, SpiceJet, Akasa Air, all of them reworked schedules, added buffers, and managed the transition without throwing the country into chaos.

IndiGo, though, seems to have charted a very different course. At least that’s what the reports suggests. It allegedly didn’t make timely roster adjustments. It didn’t plan its schedules well enough. It also increased flight departures by about 10% compared to last year’s winter schedule and about 6% compared to the summer schedule. And, surprisingly, there were even allegations of a hiring freeze on pilots, despite knowing the new rules would require extra manpower. So when the rules finally kicked in, IndiGo simply didn’t have enough pilots and crew to operate the number of flights on its schedule.

The result?

One of the worst operational crises the airline has ever seen. Its on-time performance crashed to 68%. More than 1,000 flights have been cancelled since the 2nd of December. Passengers were stranded, airports were clogged, and the ripple effects hit the entire aviation ecosystem.

Analysts have gone as far as calling it a case of monopolistic abuse, suggesting that IndiGo may not have taken the new FDTL norms seriously enough because, intentionally or not, it knows that India’s aviation system depends on it. And the fallout indeed brought large parts of Indian aviation to a halt. And when a single airline controls over 60% of the domestic market, its missteps can feel like the whole industry is stumbling.

Which brings us to the question everyone’s now asking. How did the government or even the Competition Commission, allow one airline to dominate India’s skies to this extent?

Well, the answer is actually quite simple. No one really “allowed” IndiGo to become a monopoly. If you look at how it came to dominate Indian skies, you’ll notice that IndiGo simply played the game differently. And, frankly, played it better in three major ways.

First, there’s IndiGo’s famous sale and leaseback model, the financial engine that kept the airline running even when others were bleeding. Instead of owning its planes, IndiGo planned far ahead and ordered hundreds of aircraft at massive bulk discounts. Then, when each shiny new plane arrived, it sold it to a lessor at the higher market price and immediately leased it back. That upfront difference became instant cash profit — almost like free working capital, which helped cushion its operating losses. Other airlines, like Go First or SpiceJet, placed smaller orders and never got the same discounts. And without that price advantage, they couldn’t generate this neat “trading profit” on aircraft deliveries.

Second, IndiGo kept things beautifully simple. For most of its journey, it stuck to just one family of aircraft — the Airbus A320s. IndiGo today runs one of the world’s largest A320 fleets. And this simplicity pays off. Every pilot can fly every plane. Every engineer can fix every engine. Compare that to airlines juggling both Airbus and Boeing fleets, where if a Boeing pilot calls in sick, an Airbus pilot can’t step in. With IndiGo, there’s none of that headache. It saves crores in training, maintenance, and spare parts. So yeah, simplicity became efficiency.

But the real magic, which is also a controversial point, is asset sweating or using every plane and even manpower to its maximum potential. IndiGo turned quick turnarounds into a competitive superpower. For context, while most airlines took about 45 minutes to get passengers off, clean, refuel, board, and take off again, IndiGo often pulled it off in just 20–25 minutes. And because their planes spent far less time lounging on the ground, they could squeeze in more flights per aircraft per day. That meant costs like rent and salaries were spread over more flights, lowering IndiGo’s CASK (Cost per Available Seat Kilometre) far below everyone else’s. Cheaper to operate meant cheaper tickets, more capacity, and more revenue.

And of course, IndiGo has always been unapologetically aggressive with unbundled services such as seat selection, convenience fees or onboard meals. These little extras quietly padded profits too. So while other airlines struggled to make the math work, IndiGo managed to offer lower fares and stay profitable.

Put all of that together and you’ll see that IndiGo’s market share didn’t grow because someone let it. It grew because passengers like you and me saw quicker flights, better on-time performance, and cheaper fares, and naturally chose IndiGo over the rest.

So in a way, this dominance wasn’t engineered by regulators or blessed by authorities. It just… evolved. Organically.

Which brings us to the uncomfortable part of the story. Sure, IndiGo became a monopoly through sheer strategy. But then it slipped badly. It didn’t comply with the revised FDTL rules on time, and whether it was intentional or just sloppy planning, the result was the same: a nationwide aviation meltdown.

And to restore some semblance of order, the DGCA stepped in and gave IndiGo a way out — a set of exemptions and a one-time relaxation from the new rules until February 2026. In simple terms, IndiGo gets to operate under the older, more demanding pilot-duty norms so it can “stabilise” its network.

But here’s the catch. This lifeline isn’t available to anyone else. Airlines like Air India, Akasa, and SpiceJet had already bitten the bullet by adjusting rosters, hiring extra crew, and absorbing the cost of complying with the stricter rules. They did the hard thing. IndiGo didn’t. Yet IndiGo gets the free pass. So yes, on the face of it, it does feel like an abuse of dominance.

So can the Competition Commission swoop in and penalise IndiGo? Or can the government reprimand the airline in a way that truly stings?

The short answer is no.

And that’s because the exemption came straight from the DGCA. Under Indian law, when a sector regulator explicitly permits something, even if it feels unfair, in the name of “public interest”, the CCI typically steps back. It won’t overrule the regulator right away. In this case, the government essentially sanctioned the “abuse” because the alternative was far worse: grounding the airline that carries over 60% of India’s domestic passengers.

If IndiGo stops flying, the system collapses. No other airline has the capacity to pick up the slack. And the entire network would cease.

Even the government’s suggestion of redistributing IndiGo’s airport slots to other airlines doesn’t change much. Demand has already pushed fares to unaffordable levels. So the people who end up suffering are confused, stranded passengers, who are left with almost no alternatives.

Sure, IndiGo’s stock price may have dipped. Moody’s might hint about downgrades, which could make borrowing costlier for the airline. But none of these are knockout blows. Besides, once these exemptions disappear in February 2026, IndiGo could easily find itself back in the same mess. Hiring pilots isn’t something you can speed-run. Notice periods in aviation are long, and IndiGo can’t simply poach already-employed pilots and plug them in. So filling that manpower gap quickly is almost impossible.

And that raises another uncomfortable possibility: IndiGo might need yet another extension or relaxation until it can fully comply with the FDTL rules. Which, if it happens, would be yet another unfair free pass. And penalising the airline would mean that the ripple effect on India’s already fragile aviation industry could be catastrophic.

So in a way, any punishment aimed at IndiGo ends up hurting Indian aviation, and passengers like you and me, far more than the airline itself.

The real fix lies elsewhere. The government needs to level the playing field by making it easier for airlines to actually survive. That means lowering entry barriers, easing regulatory hurdles, and bringing down sky high operating costs like fuel taxes and airport fees — which together make up nearly 40% of an airline’s expenses. With costs like that, running an airline profitably in India is almost impossible.

And until the government tackles these structural issues, we can’t magically expect more airlines to enter the market, healthy competition to emerge, or crises like this to disappear. Even though the government insists India has room for five strong airlines, we’re stuck watching one airline dominate simply because the system makes it so hard for anyone else to even take off.

Until next time…

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