Competition regulator orders probe into IndiGo’s mass flight cancellations in December

The Competition Commission of India on Wednesday ordered an investigation into whether IndiGo abused its “dominant position” as the country’s largest carrier when it cancelled and delayed several flights in December, citing a shortage of pilots and crew.

IndiGo, which has about 65% of the domestic aviation market, “effectively withheld its service from the market, creating an artificial scarcity, limiting consumer access to air travel during peak demand,” the competition watchdog said in its order.

Such conduct by a “dominant enterprise” may be viewed as restricting the provision of services under the Competition Act, its 16-page order added.

The Competition Commission of India is a statutory body set up under the Competition Act, 2002, to eliminate practices having adverse effects on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.

The case before the antitrust body was based on a complaint from a passenger who claimed his flight was cancelled hours before departure, forcing him to book an alternative. He added that the seats being offered by IndiGo and other airlines were priced much higher than the usual fares.

Between December 3 and December 5, IndiGo cancelled 2,507 flights and delayed 1,852 others, affecting more than three lakh passengers. The disruption also pushed fares to unusually high rates on several routes.

The disruptions in December came amid the rollout of stricter work hour norms introduced in November. The revised rostering norms, issued by the Directorate General of Civil Aviation in January 2024 after concerns about pilot fatigue, were meant to take effect on June 1.

However, airlines asked for delayed implementation because of staffing shortages and operational challenges, and the key changes were eventually introduced on November 1.

The new rules required longer weekly rest, restricted night landings, extended the definition of night hours and limited consecutive night duties.

On Wednesday, the Competition Commission of India directed IndiGo’s director general to submit an inquiry report within 90 days.

“It is observed that passengers who had booked tickets were left with no real choice but to accept last-minute cancellations,” the order stated. “Further, passengers were left to seek alternatives, on their own, at significantly higher prices.”

The probe is expected to examine how IndiGo’s conduct constrained consumers’ access to domestic flights, creating a “system-wide capacity shock”.

IndiGo shares dropped by over 2.5%, falling to Rs 4,827 per share on Thursday after the probe was ordered, Moneycontrol reported.

On January 17, the Directorate General of Civil Aviation imposed a penalty of Rs 22.2 crore on the airline over the widespread disruptions.

The aviation regulator said its four-member inquiry committee found that there was “an overriding focus on maximising utilisation of crew, aircraft and network resources, which significantly reduced roster buffer margins”.

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