The country’s largest airline, IndiGo recently experienced one of the most serious regulatory proceedings in its entire existence after being fined a record penalty of Rs. 22.2 crores by DGCA for flights disruptions across various routes in December last year. Thousands of flights were cancelled or disrupted, leaving over three lakh passengers stranded, which led to a root-level analysis of the entire airline network of this Indian carrier.
What DGCA Found
As per directions from the Ministry of Civil Aviation, a four-member committee was set up by the DGCA on December 4th to assess DISRUs from December 3–5. On investigating, what was uncovered was that there were inherent structural problems, rather than just operational glitches. The underlying causes for such DISRUs, as cited by the committee, were resource optimization, unprepared regulatory mechanisms, software support and management practices.
How Did the DGCA Penalise IndiGo?
The regulator thus imposed a Rs. 22.2 crore fine in totality on the basis of findings from this committee. It comprise Rs. 1.8 crore as amount for systemic violations and Rs. 20.4 crore as continuing penalty amounting to Rs. 30 lakh per day for 68 days of non-compliance. Moreover, IndiGo was asked to provide a bank guarantee of Rs. 50 crore for corrective reforms at the levels of leadership, manpower planning, digital systems and board supervision.
How Did IndiGo’s CEO Respond to the Rs. 22 Crore Penalty Over December Disruptions?
IndiGo’s management admitted to the order passed by the DGCA and said that it would take full cognizance of the report. The management added that it had been reviewing the situation internally to make itself more resilient so as to not witness such events in the future again. It showcased its track record of operation as an airline for the last 19 years.
What are the Regulatory Action Initiated Against InterGlobe Aviation Officials
Besides the fines, the DGCA decision also holds some tangible implications on the personal reputation of InterGlobe Aviation’s senior management. This is because the DGCA pointed an accusatory finger at governance issues, roster discipline and Code of amended Flight Duty Time Limitation. This is because the operation control and planning functionaries are under focus, with changes to be phased and tested before the bank guarantee is unfrozen.
What Were the Committee’s Key Findings on the Disruptions?
The committee identified that the schedules were operated by IndiGo in a manner that utilized the aircraft and the crew to a very high level, leaving very little room for error in the event of a delay. Schedules were dominated by Extended Duty Hours, Dead Heading, Tail Swap and a very small margin for error. This model, which was very efficient, failed even when faced with very small Technical and Weather Issues.
What is IndiGo’s Response to the DGCA Penalty
IndiGo, in their formal response, stated that they respect and agree to incorporate all the required changes. At the same time, IndiGo stated that it resumed its normal services, provided refunds and compensation provided additional vouchers for highly affected customers. IndiGo again stated that their overall vision remains the same, which is to help the vision for India to become an aviation hub for the world by the year 2030.
