India’s regulators order IndiGo CEO to explain mass cancellations
Interruption in IndiGo’s services has made the ongoing crisis one of the country’s worst air disruptions
[NEW DELHI] Indian regulators held IndiGo’s chief executive accountable for the severe disruptions that have roiled the country’s biggest airline in recent days, faulting the company for “significant lapses in planning, oversight, and resource management”.
The Director General of Civil Aviation issued a show-cause notice on Saturday (Dec 6) demanding CEO Pieter Elbers explain the cancellations that affected almost half of its flights the day before, adding that “you have failed in your duty to ensure timely arrangements for conduct of reliable operations and the availability of requisite facilities to the passengers.”
Disruption in IndiGo’s services has made the ongoing crisis one of the country’s worst air disruptions, with the carrier accounting for two-thirds of the domestic market operating about 2,200 flights daily.
India has also become the world’s third-largest domestic aviation market, fuelled by a rising middle class that has pushed up demand faster than airlines can grow.
The disruptions – attributed to pilot shortages – began last Tuesday. On Friday, IndiGo had cancelled more than 1,000 flights across India.
The airline said in a statement on Sunday that it is on track to operate more than 1,650 flights where its on-time performance reached 75 per cent. That was up from 1,500 on Saturday, when only 30 per cent of its flights departed as scheduled. There is “growing confidence for stabilisation of the network” by Wednesday, moving up an earlier estimate that stretched from Dec 10 to Dec 15.
The authorities asked Elbers to show cause within 24 hours after its notice “as to why appropriate enforcement action should not be initiated” against him for the violations.
Elbers, 55, took over as IndiGo’s CEO three years ago after two terms as CEO of KLM.
IndiGo’s parent InterGlobe Aviation had its worst week since his arrival after the stock slumped 9 per cent. Even with the drop, the shares have almost tripled since the Dutch executive took over as CEO, far outperforming the Sensex’s 49 per cent gain and an 8.4 per cent increase in an index tracking Asian carriers.
At airports across India, chaotic scenes unfolded following the cancellations, as thousands of people missed important family events and business meetings.
Hundreds of angry passengers thronged the gates at the Mumbai airport, shouting curses at IndiGo, and caused delays to other carriers. A couple in the southern state of Karnataka attended their own wedding reception online after being stranded, the NDTV news channel reported.
The show-cause notice came after authorities ordered an inquiry on Friday to “examine what went wrong at IndiGo, determine accountability” and recommend measures to avert such disruptions.
To prevent price gouging, the Ministry of Civil Aviation imposed price restrictions, capping prices at 7,500 rupees (S$108) per ticket for trips of up to 500 km, and 18,000 rupees for those exceeding 1,500 km.
Meanwhile, Indian Railways said that it was adding 116 coaches to its 37 trains from Saturday. The state-owned railway system was also running four special train services. BLOOMBERG
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