IndiGo experienced significant operational disruptions due to the implementation of new flight duty time limitations. This led to widespread flight cancellations, peaking on December 5, 2025, with approximately 70% of daily flights grounded. Despite these challenges and anticipated near-term financial impact, ICRA has reaffirmed IndiGo’s credit rating at [ICRA]AA (Stable), supported by its dominant market share and strong liquidity position.
Operational Challenges and Response
IndiGo faced severe operational disruptions, resulting in widespread flight delays and cancellations. On December 5, 2025, cancellations peaked, affecting around 1,600 flights, representing approximately 70% of the airline’s daily schedule. The primary cause was the implementation of Phase II of the Flight Duty Time Limitation (FDTL) norms effective November 1, 2025. Additional challenges included winter schedule enhancements, air traffic congestion, technical issues, and adverse weather conditions.
Financial Impact and Near-Term Outlook
The operational disruptions are expected to significantly impact IndiGo’s near-term financial performance, potentially leading to revenue loss from cancellations, refunds, increased operating costs, and regulatory penalties. ICRA expects financial leverage (Net debt/EBITDAR) to breach 2.5x in FY2026 but does not anticipate the breach to persist. ICRA expects profitability for the current fiscal year to be under pressure due to operational disruptions and the depreciation of the Indian Rupee against the US Dollar.
Rating Rationale
ICRA has reaffirmed IndiGo’s credit rating at [ICRA]AA (Stable), supported by the company’s dominant market share in the Indian aviation industry (around 65% of domestic passenger traffic), strong growth prospects, and healthy liquidity profile. As of September 30, 2025, IndiGo had unencumbered cash and equivalents of approximately Rs. 38,500 crore. The temporary relief granted by the Directorate General of Civil Aviation (DGCA) on compliance with night-duty norms until February 10, 2026, is expected to support near-term recovery.
Source: BSE
