Speaking to ET Now about the strain on operations, Shobit Singhal from Anand Rathi Institutional laid out the potential scale of the impact.
“So, if you see first on the revenue side I would like to say, so IndiGo flies around 2,300 flights per day. And if you see during the last 10-15 days, from November end till date, so IndiGo has cancelled around 4,000-5,000 flights cumulative. And from October onwards, if we see, they have cancelled around 7,800. And if this continue till the quarter end, till December end, so it will be around 9,000 to 10,000. So, if you multiply daily 2,300 into 90 days for the quarter, so it comes around 2,700 and if they cancel around 10,000 flights cumulative during the quarter, so on the revenue front, it will impact around 5% to 7% on the revenue front.”
The cancellations come at a time when the airline is grappling with new Flight Duty Time Limit (FDTL) regulations that require more pilots on rotation. Singhal added that staffing pressures would further inflate costs.
“So, for this, for the new rule which is the FDTL, they need to adhere to this rule, so they will be needed additional 800 to 1,000 pilot going forward as well. So, we believe that around 2% of the pilot cost will increase for them going forward from 4% to 6% type of the revenue.”
‘Temporary blip’, says SinghalThe airline’s stock has already corrected more than 7% since the disruption began, raising questions about whether the worst is yet to come. Singhal, however, believes investors should see this period as transitional rather than structural.“So, we believe this is a temporary thing and they are doing everything to stabilise the operations and within a two weeks or three weeks we think that all the cancellations will be done and you rightly said that yes, they are the market leader with around 65% markets, that the daily fleet size of 2,300 flights per day, the second one is Air India which is around just 1200, 1300, and then SpiceJet, Akasa which has just around 200 flights per day. So, the frequency, everything, so we believe that this is a temporary blip and if any further correction, it should be taken as an opportunity to buy.”Market experts largely agree that IndiGo’s scale and dominance in the domestic sector give it a cushion, though the immediate quarters may reflect heightened volatility.
More pressure ahead in Q4?If the government enforces a further cut of about 300 flights per day in the upcoming quarter, IndiGo could be looking at cancellations escalating to around 10% of its schedule. This would bring cumulative revenue pressure well into double-digit territory for the second half of the year.
Singhal explained the near-term earnings drag:
“So, for this quarter we are expecting because we have seen the historical trend that if such cancellation continues till the end of the quarter, the revenue gets impacted by around 5% to 7% and same with the EBITDA. Even in fourth quarter if government tells them to curtail some of the operation by 10%, so similar kind of revenue will get impacted.”
Adding to these operational headwinds is the sharp depreciation in the rupee, which amplifies the airline’s forex losses due to dollar-denominated liabilities like lease rentals and maintenance.
“On your questions on the forex loss, so one rupee depreciation impact around 850 to 900 crores loss for them. So, even in Q2 we have seen, so three rupees depreciation they have reported around 2,500 crore of forex loss. So, we expect similar kind of forex loss this quarter as well.”
A challenging winter, but long-term position intactDespite the rough patch, analysts say IndiGo’s long-term outlook remains supported by its unmatched fleet scale, route network and cost leadership. The next few weeks, however, will test the airline’s ability to quickly restore normalcy, manage staffing demands and navigate external pressures—including volatile ATF prices and currency movements.
If cancellations ease as expected and operations stabilise by year-end, the current disruption may ultimately be remembered as a short-lived setback for India’s market leader in aviation.
