IndiGo Airlines (6E, Delhi International) has lowered its financial guidance for the third quarter of the 2026 financial year, ending December 31, after the Directorate General of Civil Aviation (DGCA) ordered a 10% capacity cut and deployed oversight teams to monitor the airline's operations following an operations meltdown.

In a regulatory filing on December 10, the airline revised its capacity growth forecast in terms of available seat kilometres (ASK) down to "high single- to low double-digit" growth, compared to its earlier projection of "high teens" growth. Consequently, passenger unit revenue (PRASK) is now expected to see a "mid-single digit" decline, a downward moderation from the previously guided "flattish to slight growth".

The revision follows an order from the DGCA on December 9 notifying IndiGo to curtail its scheduled domestic flights for the 2025 winter schedule by 10%. The airline stated that the cut would impact its capacity guidance for the third quarter, fourth quarter, and the full financial year.

Indian regulator monitors recovery

Simultaneously, the DGCA has constituted an eight-member oversight team to monitor the carrier's recovery. Two members of this team, along with other officials, will be stationed at IndiGo's corporate headquarters in Gurugram to review key parameters, including fleet availability, crew utilisation, unplanned leave, and passenger refund status.

The regulator also ordered immediate on-site inspections at 11 airports to assess safety, passenger facilitation, and airline responsiveness. The airports include Nagpur, Jaipur, Bhopal, Surat, Tirupati, Vijayawada, Shirdi, Kochi International, Lucknow, Amritsar, and Dehra Dun.

The regulatory intervention was triggered after IndiGo cancelled approximately 4,500 flights during the first week of December due to operational disruptions linked to the implementation of new flight duty time limitations (FDTL). The airline said operations have since been reinstated across an "optimised" network.

The DGCA has summoned IndiGo CEO Pieter Elbers to appear before it on December 11 to present comprehensive data on the disruptions. Show-cause notices have also been issued to Elbers and other senior executives.

To stabilise operations, the regulator has granted the airline a temporary exemption from certain FDTL norms for its A320-200 pilots until February 10, 2026.

SpiceJet eyes capacity gap

Meanwhile, rival SpiceJet (SG, Delhi International) has launched a "major winter push" to fill the capacity void created by IndiGo's curtailment. In a statement quoted by local media, the carrier outlined plans to add up to 100 daily flights during the ongoing winter schedule, subject to regulatory approval.

The expansion comes as the 10% cut to IndiGo's schedule translates to roughly 110 daily flights being reassigned to other carriers. SpiceJet stated that its move reflects "strong and growing demand across key routes" and aims to improve network resilience.

The airline has been building capacity ahead of the announcement, with over 20 aircraft returning to service in the current quarter through a mix of damp leases and reactivations.