InterGlobe Aviation board faces sharp criticism from proxy advisory firm SES over FDTL crisis

By December 8, IndiGo reported operating over 1,800 flights with a 90 percent on-time performance, up from 75 percent the previous day.

Stakeholders Empowerment Services (SES) has sharply criticised InterGlobe Aviation Ltd, parent of IndiGo, for what it calls a “failure of the board to enable excellence in governance,” following the massive disruption across major airports last week and the alleged non-compliance with Flight Duty Time Limitations (FDTL).

According to SES, IndiGo’s operational meltdown, marked by widespread delays, cancellations, and soaring airfares, reflects a deep-rooted “chalta hai” and “will manage” culture and conscious commercial decisions that compromised pilot fatigue norms to cut costs and maximise capacity.

Despite warnings and clear regulatory requirements, SES argues the board and its sub-committees, particularly the Risk Management Committee and the Stakeholders Relationship Committee, failed to anticipate or mitigate the fallout. The advisory firm questioned why the board waited until the crisis erupted to set up a Crisis Management Group, suggesting minutes of board meetings could reveal whether the impending non-compliance was discussed but ignored.

SES questioned, “Was the Board not aware that the problem of cancellations and delayed flights would arise if they continued with this scale? Why did it wait until the crisis instead of acting proactively? No one would believe that the Board of IndiGo, which is graced with the presence of stalwarts, was unaware of FDTL. That leads us to conclude that the Board would have monitored compliance and would have come to know that it was looking at certain failure in the future. What did they do?”

The report further alleges IndiGo failed both employees and passengers by risking safety, overworking crew, and charging “super-normal” fares after its own operational lapses. SES criticised the airline’s press statement blaming a mix of weather, technology issues, winter scheduling, and overall congestion. “If FDTL was not the sole cause, why did other airlines not face similar disruptions?” SES asked.

SES also questioned whether InterGlobe Aviation violated SEBI’s LODR disclosure requirements by not informing stock exchanges about Directorate General of Civil Aviation (DGCA) show-cause notices issued on August 11 and December 6 regarding the use of “non-approved full flight simulators” and other compliance failures.

The SES report stated, “SEBI should examine whether under LODR Regulations, IndiGo was required to disclose the show-cause notice issued by DGCA on 11th August 2025 for using ‘non-approved full flight simulators.’ Even the show cause issued by DGCA on 6th December has not been disclosed to exchanges. Hopefully, IndiGo will not turn around and deny receipt of the notice, as it is addressed to the CEO, IndiGo Airline, and not to InterGlobe Aviation.”

Besides Rahul Bhatia, the group MD of InterGlobe Enterprises, the board of the company includes prominent names like former Niti Aayog CEO and retired IAS officer Amitabh Kant; Vikram Singh Mehta, former Chairman, Shell India; Pallavi Shardul Shroff, Managing Partner, Shardul Amarchand Mangaldas & Co.; former IAF Chief BS Dhanoa; and M Damodaran, former SEBI Chairman, a well-respected name in corporate governance advisory who also runs a governance advisory firm, Excellence Enablers.

The SES report further states that the law mandates a Stakeholders Relationship Committee (SRC) for all listed companies. As the name suggests, it is a board sub-committee to take care of stakeholders, not to be confused with or limited to shareholders. It says, “For a utility like IndiGo, employees (including pilots/cabin crew/front desk) and passengers are the two largest stakeholders. Unfortunately, it appears IndiGo failed both—by playing with the safety of stakeholders in not implementing FDTL and also by fleecing hapless passengers in the aftermath of the fiasco. Again, a failure of all SOPs and the framework which IndiGo claims for its operational excellence. Shareholders must ask tough questions from the Board, as they too have lost.”

The report said the episode should serve as a wake-up call to corporate boards: “Merely talking about good governance will not enable excellence; one has to walk the talk.”

However, SES also cautioned that Government should not take any knee jerk action. In its report SES said, “Dismissing Board & CEO is not the solution, it is not ‘Satyam’ but a utility. If Satyam was shut down public would not have suffered, in this case it is public and there is no fraud”. SES said, that dismissing the board would only force others to clean up the mess created by the present board and management, adding that such a move “could be even more messy.” It said a thorough introspection is needed to understand what triggered the crisis at IndiGo and how an aviation market that once had more than half a dozen airlines has now slipped into a near-duopoly. The advisory firm stressed that identifying and implementing structural reforms should be at the top of the policy agenda.

SES also noted that the legal system needs urgent attention, citing Jet Airways as an example of an airline still trapped in the prolonged freeze of legal proceedings. It further recommended that the DGCA direct all airlines, travel websites, and travel agents to prominently display the Passenger Charter on their booking platforms.

SES also flagged the broader regulatory dilemma, noting that the DGCA, constrained by the near-duopoly in the domestic aviation market, allowed temporary relaxation of FDTL norms to protect public interest—a move the agency says inadvertently rewarded airlines with higher fares due to reduced capacity.

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Calling this a case where “failure brought bounty,” SES urged the DGCA to consider disgorgement of excess fares collected during the disruption and impose penalties equivalent to cost savings from FDTL violations. SES wrote, “IndiGo failed to maintain its schedule and cancelled flights. Their failure reduced available capacity. Thus, demand and supply mismatch. Free enterprise concept came into play and fares skyrocketed. So, failure brought bounty. In the securities market, regulator SEBI has a concept of disgorgement. Any profit earned by creating an abnormal situation must be disgorged. The least DGCA can do is to order disgorgement of all super-normal fares charged from hapless consumers.”

The advisory firm urged the DGCA to use the crisis to strengthen enforcement and prevent airlines from leveraging public inconvenience to pressure regulators.