India’s aviation sector is once again at an inflection point, with the meltdown at IndiGo—marked by mass cancellations, spiralling fares and widespread passenger distress—laying bare deeper structural and governance failures that have long plagued the industry. A new analytical report by Stakeholders Empowerment Services (SES), a proxy advisory, has sharply criticised IndiGo’s board for failing to enforce governance discipline, particularly in relation to flight duty time limitations (FDTL) and has questioned the directorate general of civil aviation (DGCA)’s capacity to act decisively without harming the public interest. When read together with the broader state of Indian aviation, the crisis signals the urgent need for structural reform rather than reflexive action such as replacing the chief executive officer (CEO) or dismissing the board.
The report argues that IndiGo’s descent into chaos was neither unforeseen nor merely a product of operational glitches, winter schedules or congested airspace—claims made in the airline’s press statement on 3 December 2025. Instead, it points to a deliberate choice to stretch FDTL norms to maximise commercial gains, reduce pilot costs and increase flight frequencies.
Despite being aware that sustained non-compliance risked triggering cancellations and sweeping disruptions, the IndiGo board and its risk management committee appeared to have placed unwarranted faith in DGCA's vulnerabilities and the expectation that 'things will manage themselves', rather than choosing tougher, safety-oriented decisions.
This 'chalta hai' culture—highlighted repeatedly in the analysis—suggests that IndiGo’s board was not merely negligent but ignored foreseeable risks while depending on the DGCA’s reluctance to ground a near-duopoly airline serving millions. The airline’s announcement that it set up a crisis management group only after the crisis erupted raises questions about whether the board was inert, complacent or simply outpaced by events that governance processes should have pre-empted.
Yet, as the SES report and independent analysts emphasise, the DGCA and the government must avoid knee-jerk reactions. Calls to sack the board or CEO may appear decisive but would not address the systemic roots of the problem. "Unlike the Satyam scandal—where a fraudulent company could have been shut without causing immediate public inconvenience—IndiGo is a utility. Shutting down a dominant airline in a duopoly would compound the suffering of passengers and destabilise the domestic aviation market. Moreover, dismissing the board could merely force others to clean up a mess created by the current leadership, creating more volatility rather than restoring stability," SES says.
The more urgent need is introspection into why such a crisis occurred, despite existing regulations and oversight mechanisms. India once had over half a dozen airlines, but consolidation, financial stress, and regulatory complexity have gradually reduced the market to a near duopoly.
This market structure not only burdens DGCA with a public-service obligation but also encourages airlines to behave like private entities in a competitive market while benefiting from the leverage of being essential utilities.
The report notes that reduced capacity from IndiGo’s cancellations created a demand–supply imbalance, allowing fares to skyrocket. This perverse outcome—where failure becomes profitable—is described as akin to 'Ripley’s Believe It or Not' in the analysis.
Drawing parallels with the securities market, where regulator Securities and Exchange Board of India (SEBI) can order disgorgement for profits arising from abnormal situations, SES suggests that DGCA should impose a similar framework. "Any fare charged above the average of the previous seven days should be disgorged from all airlines, not just IndiGo. Moreover, all cost savings arising from non-compliance with FDTL should also be clawed back and penalised. Such an approach would force airlines to internalise the costs of public inconvenience and discourage gaming the system."
Beyond fares, the airline’s governance lapses also raise questions under securities law. Show-cause notices issued by the DGCA—one on 11 August 2025, regarding 'non-approved full flight simulators' and another on 6 December 2025—were allegedly not disclosed to stock exchanges. Whether these warranted mandatory disclosure under the listing obligations and disclosure requirements (LODR) regulations is an issue SEBI must scrutinise. If material enforcement communications are withheld, investors and stakeholders are left in the dark about operational and regulatory risks.
At the core of the crisis, however, lies a stark failure of stakeholder governance. The stakeholders’ relationship committee, mandated for all listed entities, is meant to safeguard the interests of employees and passengers—the two largest groups affected by the airline’s decisions.
"Yet both groups faced the brunt of mismanagement: pilots were stretched beyond limits and passengers endured cancellations, long queues, erratic rescheduling and exorbitant fares. Frontline staff, bearing the anger of stranded travellers, became unwitting shock absorbers for structural failures far beyond their control," the SES report says.
The crisis also brings into focus India’s slow-moving legal system. Jet Airways, once a leading carrier, remains stuck in what aviation experts describe as the 'deep cold storage' of legal processes, demonstrating how India’s framework for airline insolvency remains ill-equipped to support timely restructuring. Unless legal processes are streamlined, the report warns that the risk of future collapses—whether through operational mismanagement or financial distress—will continue to loom over the sector.
DGCA must also take this moment to strengthen consumer-facing transparency. It should require all airlines, online travel agencies and booking platforms to
prominently display the passenger charter on their websites to ensure flyers understand their rights related to refunds, cancellations, delays and compensation. Making this easily accessible is the first step toward restoring trust in a system that has repeatedly failed passengers.
Ultimately, the current crisis must serve as a springboard for deeper structural reform rather than a search for scapegoats. Stronger oversight, a functioning competitive landscape, uncompromising safety norms, transparent disclosures, clear consumer rights and a responsive legal system are all essential if India wants to prevent another collapse of this magnitude.
The challenges facing IndiGo are not isolated—they reflect the fragility of an aviation ecosystem that urgently needs redesigning, not merely firefighting.
To save a few rupees, you might end up losing your life.
Only such a drastic action by the traveling public will wake up the board and management of the airline.