Terming it a "serious incident", aviation regulator DGCA has suspended the two Jet Airways pilots and initiated a probe into the incident.
It has also set up a three-member team to review the airline's flight training programmes and facilities following the incident last Friday, official sources said, adding the team has been asked to submit their report by August 31.
DGCA has directed the airline to come forward with all related reports, as well as the records of the Digital Flight Data Recorder (DFDR) within this week, they said.
The incident occurred when the Boeing 777-300, operating flight 9W-228 from Mumbai to Brussels and onwards to Newark, plunged from 34,000 feet to 29,000 feet while traversing on the busy air route to Europe.
As the aircraft descended, the air traffic control at Ankara sent an emergency message to the aircraft asking the pilots why they had deviated from the assigned flight path and directed them to climb up to the designated height immediately.
Both pilots were summoned by DGCA yesterday for questioning.
While the commander said he was on "controlled rest", implying a short nap inside the cockpit which is allowed by flight operation procedures, the co-pilot told the regulator that she was working on her iPad or the electronic flight bag which has all aircraft documents loaded on to it, the sources said.
Immediately after the Ankara ATC message, the co-pilot woke up the commander who restored the height of the plane.
Confirming the incident, an airline spokesperson said Jet Airways has initiated an internal inquiry into the matter.
"The airline is also extending all co-operation in the matter to the DGCA by providing all necessary assistance for the inquiry. Safety is of paramount importance to Jet Airways as is also the welfare of our guests and crew and the airline will always take appropriate steps to ensure the same," the spokesperson said.
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Following the incident, DGCA has constituted a team comprising officials from its Airworthiness, Air Safety and Flight Operations wings to audit Jet Airways' training procedures for pilots for an entire year.
The team would also look into the airline's training policies, including how it defined 'controlled rest' for a pilot, the sources said, adding that inspections would also be carried out of its training facilities.
The regulator would also probe why the airline or the pilots failed to report the incident to it, as the DGCA got to know of the incident only after an anonymous message, the sources said.
While both the pilots kept flying until they were grounded two days ago, they did not even file a flight safety report, which is a mandatory exercise to document any untoward incident during the course of a flight, they said.
The cockpit crew should have informed the airline which in turn should have apprised the Accident Investigation Board of the incident, the official sources added.
The DGCA would also enquire into whether there was any technical failure in the aircraft which led it to lose height and going for an 'uncontrolled descent' or was any switch accidentally pressed by any of the pilot, they said.
The Aircraft Accident Investigation Bureau has been asked to conduct a detailed investigation into the incident which could take 4-5 months.
Only after the Board gives its report, would it be possible to determine the quantum of penalty, if any, for the pilots, officials said.