Large flight disruption at IndiGo cost the airline ₹577 crore

IndiGo’s cancellation of about 5,000 flights in November and December cost the airline ₹577 crore, contributing to a 77.6% plunge in profit to ₹549 crore for the quarter ended in December.

The airline recorded a profit of ₹2,448 crore in the year-ago period. The decline in profit was also driven by the implementation of new labour laws, which led to a charge of ₹969 crore, and by currency movements related to dollar-denominated future obligations amounting to ₹1,035 crore.

The airline’s Chief Financial Officer, Gaurav Negi, said aircraft capacity additions would moderate to about 10%, down from the 19%, as deliveries have been aligned with a reduced flight schedule following a 10% cut imposed by the DGCA, resulting in 200 fewer flights.

CEO Pieter Elbers didn’t answer questions from analysts on how the airline was reviewing its pilot recruitment plan to comply with the new duty norms, and the exact number of pilots it is short of.

Flight cancellations in November and December crossed 5,000, disrupting travel for 9.5 lakh passengers between November 21 and December 7 and leading to refunds of ₹827 crore. The DGCA fined the airline ₹22 crore for failing to implement the new duty and rest norms for pilots that came into effect on November 1, after the airline sought an exemption following the cancellations. The regulator said the disruptions were caused by the airline overstretching its pilots and aircraft.