IndiGo reviews internal processes after disruptions as profits plunge 78%
What's the story
IndiGo, India's leading airline, is conducting a thorough review of its internal processes. The announcement comes from CEO Pieter Elbers in light of major operational disruptions experienced last month. The airline has reported a whopping 78% drop in profits due to rising costs and the financial impact of these disruptions.
Profit drop
Financial performance impacted by operational challenges
IndiGo's profit for the three months ending December has fallen by 78% to ₹549.1 crore. This sharp decline is largely attributed to rising costs, including a ₹577 crore financial hit from the recent operational disruptions. The Directorate General of Civil Aviation (DGCA) had earlier curtailed IndiGo's winter schedule by 10% and imposed penalties over alleged mismanagement of flight crew and operational failures.
Operational stability
Response to operational disruptions and DGCA orders
In the wake of the disruptions, Elbers said many factors were at play. He assured that IndiGo is identifying these factors and their contribution to the situation. The airline has already started a root cause analysis to understand what led to these major disruptions. Between December 3-5 last year, IndiGo canceled 2,507 flights and delayed another 1,852 flights affecting over three lakh passengers across India.
Regulatory compliance
Commitment to DGCA orders and operational stability
Elbers said the board and management of IndiGo are fully aware of the DGCA orders and will take appropriate actions in a timely manner. He also said that IndiGo's operations have stabilized now. The airline has assured DGCA that it has enough pilots to meet new flight duty norms without any disruptions.
Regulatory insights
DGCA's findings on IndiGo's operational disruptions
On January 20, DGCA said the disruptions were due to mismanagement of adequate flight crew, inadequate regulatory preparedness at the operator level, and shortcomings in system software support, management structure, and operational control. The regulator also noted that IndiGo's planning processes failed to identify operational deficiencies or maintain sufficient buffers. There was an excessive focus on maximizing utilization of crew, aircrafts and network resources which led to reduced roster buffer margins.