The latest on IndiGo’s ongoing challenges – Moody’s Ratings has warned that the recent wave of flight disruptions at IndiGo is “credit negative” for the airline, as per a report by PTI. Moody’s also said that this could result in financial damage from loss of revenue as well as potential penalties for cancellations, as per the PTI report quoting Moody’s.
According to Moody’s this is a serious concern of failures in planning despite FDTL regulations being communicated to the industry more than a year in advance.
Moody’s points to major planning failures
The PTI report elaborates the Moody’s perspective on the recent disruptions. “Recent flight disruptions underscore significant lapses in planning, oversight and resource management by IndiGo because the new regulations had been known to the industry for more than a year. The airline’s lean operations, which provide cost efficiencies in stable times, lacked the resilience needed for this change in regulations, leading to the need for a system-wide reboot that led to cancellation(s),” Moody’s said.
IndiGo’s operations have been severely impacted since December 2, leading to over 1,600 cancellations on December 5 alone. The airline had already grounded more than 1,200 flights in November because of similar disruptions.
Moody’s downgrades IndiGo’s human capital
Moody’s has downgraded IndiGo’s issuer category score for human capital to 4 from 3, citing slower hiring and growing collective bargaining power among pilots. “We have downgraded IndiGo’s issuer category score for human capital to 4 from 3, reflecting the adverse impact of slower hiring on the airline’s operations. Although IndiGo does not have employee unions, its pilots, through broader pilot associations in India, possess significant collective bargaining power.”
“IndiGo’s governance issuer category score of 3 for management track record captures management’s lack of judgment and preparedness for the impending regulatory changes,” it added.
Profitability expected to decline in FY26 amid FDTL impact: Moody’s
The rating agency said the airline’s social issuer profile score remains at S-4, indicating high exposure to social risks, while its governance profile stays at G-3. Moody’s noted that the fundamentals of IndiGo’s Baa3 rating remain stable, supported by its dominant market share, low air travel penetration in India and strong macroeconomic environment.
Moody’s noted that while the overall financial impact remains uncertain as IndiGo adjusts its operations to comply with FDTL regulations, “the airline’s profitability will be negatively impacted in the current fiscal year ending March 31, 2026,” it said, according to PTI.
“Quantitative impact of the disruption remains uncertain at this point as the scale and profitability of IndiGo’s operations evolve following adjustments to comply with FDTL regulations,” the rating agency added.
The agency also flagged reputational damage from the disruptions, which could affect IndiGo’s code-sharing partnerships.
New norms expand night-duty window, limit daily landings
The disruptions stem from Phase 2 of the Flight Duty Time Limitation (FDTL) rules enforced from November 1, 2025. The norms classify midnight to 6 a.m. as night duty and cut the number of landings allowed in 24 hours to two or three.
IndiGo has secured a temporary DGCA exemption from the new FDTL norms until February 10, 2026, subject to reviews every 15 days. The airline must also submit a 30-day roadmap for full compliance.
DGCA , MoCA steps in amid widespread cancellations
More than 500 flights were cancelled on Monday as the carrier struggled to stabilise its schedule. The delays and cancellations came during the peak winter season and were aggravated by fog and adverse weather.
Looking at this mass cancellations, DGCA had issued show-cause notices to IndiGo CEO Pieter Elbers and COO Isidro Porqueras, raising questions about leadership continuity. The Ministry of Civil Aviation (MoCA) has directed the airline to process all refunds by December 7 without any levies.
