IndiGo Shares Rebound After DGCA Grants Partial Relief on Pilot Duty Norms

IndiGo Shares Bounce Back as DGCA Offers Partial Relief on Pilot Duty Rules Amid Nationwide Flight Disruptions

In a dramatic turnaround on Friday, IndiGo shares erased all intraday losses and moved into positive territory after the Directorate General of Civil Aviation (DGCA) announced a partial relaxation of pilot duty and rest regulations. The move comes at a time when the airline is grappling with one of the worst operational disruptions in recent years, marked by a significant crew shortage and more than 1,000 flight cancellations across major Indian airports.

Market Reacts as IndiGo Stock Stages Strong Intraday Recovery

After slipping over 3 percent during early trade, shares of InterGlobe Aviation, the parent company of IndiGo, rebounded sharply. By 1:30 pm, the stock climbed 0.6 percent higher to ₹5,472.50, marking an impressive swing of nearly 4 percent from its intraday low of ₹5,265.

Investor sentiment improved once DGCA notified that it was withdrawing a critical FDTL clause that had earlier prohibited airlines from substituting mandatory weekly rest with accumulated leave. Market analysts noted that this rule change was seen as a primary contributor to IndiGo’s staffing challenges and subsequent cancellations.

Also Read : DGCA Eases Pilot Rest Rules to Help Stabilize IndiGo’s Operations Amid Flight Disruptions

DGCA Withdraws Restrictive Rest Rule to Support Crew Rostering

In response to IndiGo’s severe operational stress, DGCA confirmed that it has withdrawn the provision barring substitution of weekly rest with leave, giving carriers more flexibility to rebuild their schedules.

The regulator stated, “In view of the ongoing operational disruptions and representations received from various airlines regarding the need to ensure continuity and stability of operations, it has been considered necessary to review the said provision.”

Additionally, DGCA granted IndiGo a one-time temporary exemption from certain night duty rules under the new FDTL norms until February 10, offering further breathing room to stabilize rostering during peak disruptions.

Flight Cancellations Surge as IndiGo Battles Pilot Shortage

IndiGo’s operations have been hit especially hard this week. The airline cancelled all domestic flights departing from Delhi until midnight, severely impacting passenger movement at India’s busiest airport. With roughly 235 daily departures from the capital, the cancellations resulted in widespread confusion and long queues.

The disruption extended beyond Delhi. IndiGo also cancelled all departures from Chennai until 6 pm, adding to the mounting operational chaos. With the airline controlling nearly 60 percent of India’s domestic aviation market, the cascading effects were felt across the country.

A key driver of the turbulence is the sharp shortage of pilots, particularly after the introduction of revised Flight Duty Time Limitation (FDTL) norms last month. These new rules mandate longer rest periods and impose more structured rostering, leaving IndiGo struggling to align its large network under the updated framework.

IndiGo Issues Public Apology as Disruptions Intensify

Amid rising passenger frustration, IndiGo issued an apology acknowledging the scale of disruptions.
The airline said it faced a “multitude of unforeseen operational challenges,” including:

• Minor technology glitches

• Winter schedule adjustments

• Weather-related delays

• Increased congestion in the aviation system

• Implementation of the updated FDTL norms

IndiGo admitted that these overlapping issues had a “compounding impact” on operations, making it difficult to anticipate the severity of the disruption.

DGCA Seeks Detailed Report from IndiGo on Widespread Disruption

The aviation regulator has also begun investigating the matter. DGCA confirmed that it has asked IndiGo to submit a detailed report outlining the causes of the cancellations and the steps planned to mitigate future disruptions.

The regulator emphasized the need to minimize passenger inconvenience and ensure that operations return to normalcy at the earliest.

Brokerage Houses Expect Gradual Normalisation but Warn of Near-Term Strain

Global brokerage firms are cautiously optimistic about IndiGo’s recovery trajectory:

Citi noted that while DGCA’s relaxation provides short-term relief, on-time performance may remain weak and full normalization could take longer.

Morgan Stanley, meanwhile, projected rising cost pressures for IndiGo due to:

• Higher salaries

• Rupee depreciation

• Increased fuel expenses

The firm expects margins to remain under stress through FY26 and has cut FY27–FY28 EPS estimates by nearly 20 percent.

Yet, both brokerages expect airfares to rise as capacity remains tight and demand improves.

Morgan Stanley maintained its ‘Overweight’ rating with a target price of ₹4,540, while Citi reiterated a ‘Buy’ rating with a target of ₹6,500, citing long-term aviation demand despite short-term volatility.

Aviation Sector Watches Closely as IndiGo Stabilizes Operations

As DGCA’s regulatory relaxation takes effect, the market will closely monitor how quickly IndiGo restores its network. The airline’s dominant domestic presence means its operational health directly influences industry-wide performance.

For investors, the latest developments highlight both the resilience and vulnerability of India’s aviation ecosystem. While regulatory flexibility offers temporary relief, the coming days will determine whether IndiGo’s operational stability can be rebuilt sustainably.

• Nifty 50
• Bank Nifty
• Sensex