InterGlobe Aviation's low-cost carrier IndiGo saw its worst disruption in five years, leaving thousands of passengers stranded and flights cancelled. In a report, Institutional Investor Advisory Services India Limited (IiAS) said that IndiGo's board "has failed not only in managing the crisis but also in taking responsibility for a problem largely of its own making."
The investor advisory service noted that despite the current turmoil at InterGlobe Aviation having impacted several of the company’s stakeholders – employees (pilots, ground staff, and flying crew), passengers, shareholders, and regulators – its board has remained silent, until recently.
As the crisis started, the first formal communication from IndiGo was on December 6, indicating that the objective of flight cancellations was to “reboot the network, systems, and rosters” so that it could start afresh. "The statement acknowledged the distress caused to passengers, and the pressure on employees (especially ground staff dealing with irate customers) almost as an afterthought," noted IiAS. The statement, too, was signed by an unnamed spokesperson, an individual was not even named.
IndiGo cancelled more than 1,000 flights in a single day after failing to comply with the DGCA’s revised pilot duty and rest rules, despite having ample time to prepare. There is still no clarity on why the airline was unprepared or whether the board provided adequate oversight, said IiAS. Calling the mass cancellations a move to “reboot the network, systems, and roster” appears opportunistic, as a planned exercise would have involved advance communication to passengers and staff.
The airline's board also comprises several experienced aviation personnel: a former airline chief, a former chief from the Indian Air Force, and an administrator of a US aviation regulatory body. "Given the relevant experience and quality of the board, stakeholders must seek answers for IndiGo’s apathy," urged the advisory service.
"Corporate culture the one single element that impacts all aspects of business. Peter Drucker is right: corporate culture often eats strategy for breakfast. The airline’s apathy in the current situation is a telling sign of how it may have built its corporate culture," it added.
The report further stated that the DCGA’s new regulations on pilot hours and rests would have resulted in the company having to hire more pilots to maintain the same flying hours. The company had sufficient opportunity to gradually increase the pool of pilots and reduce individual pilot’s flying hours – yet it chose not to.
Ground staff were left without answers, making them as helpless as the stranded passengers they were trying to help. This institutional indifference extended to passengers as well, with several reports noting that travellers were checked in and kept waiting for hours before flights were eventually cancelled.
"The pursuit of profits cannot come at the cost of the airline’s employees, customers, and aviation safety. Aviation history offers several examples of crashes linked to pilot fatigue; mechanical and procedural safety have clear limitations when pilots are not well-rested."
Unfortunately, IndiGo probably believes that it can afford the customer apathy as it enjoys a dominant position in an oligopolistic market. "Customers may be disappointed, but they cannot fully turn away. IndiGo may lose its spot as their first choice, yet it remains a necessary option. The company seems to be banking on this when it states that it is “committed to build back the trust” of its customers," the report said. IndiGo’s reputation damage will be enduring, but not a complete loss.
The board let the situation spiral, reflecting poor risk management, weak stakeholder handling, and a lapse in basic operations. Announcing a crisis committee only after recovery efforts began is too little, too late. Ignoring regulatory changes until they triggered a crisis is reckless and risks angering regulators as much as customers and employees. "Someone needs to step up and demonstrate leadership - it will be a shame if it is the regulator and not the board," the report concluded.
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