The Indian government is preparing to take stricter action against IndiGo after the airline cancelled more than 2,000 flights last week, disrupting passengers across the country. Officials said the goal is to “set an example” for airlines that fail to follow regulatory norms.

Following news of potential penalties, IndiGo’s shares plunged 8.7% on Monday, marking their steepest fall since February 2022. The stock has now been declining for seven consecutive sessions, wiping out nearly $4.5 billion in market value.

IndiGo, which commands a dominant 65% share of India’s domestic aviation market, submitted its explanation to the Directorate General of Civil Aviation (DGCA). The airline cited a combination of new pilot duty and rest guidelines and several “minor” technical issues as the primary reasons for the cancellations.

The new crew duty norms, implemented to prevent fatigue, have required IndiGo to rework schedules and increase staffing levels, creating short-term operational strain.

Technical issues affecting a portion of its fleet further added to disruptions, compounding the airline's inability to maintain its high-frequency schedule.

In Parliament, the government revealed that IndiGo employs 5,085 pilots, representing nearly one-third of all pilots working with major Indian carriers. The scale of cancellations despite such a large workforce has raised concerns about IndiGo’s internal planning and operational resilience.

With investigations underway, industry watchers expect tighter regulatory oversight ahead—potentially reshaping airline accountability across India’s rapidly growing aviation sector.