New Delhi: ICRA on Wednesday affirmed InterGlobe Aviation’s (IndiGo) long-term rating at AA (Stable) and short-term rating at A1+, even as it flagged significant near-term financial and operational pressures following last week’s unprecedented network disruption.
In an update issued on December 10, the rating agency said IndiGo’s large-scale flight cancellations—peaking at 1,600 flights on December 5, or nearly 70% of daily operations—stemmed from constraints introduced by Phase II of the revised Flight Duty Time Limitation (FDTL) norms, which tightened night-duty definitions and pilot rest requirements. The disruption was amplified by winter congestion, weather issues and technical snags.
ICRA said IndiGo, long considered an operationally efficient carrier, “experienced the tail risks” of running on thin buffers in a highly interdependent aviation ecosystem. While the DGCA has granted temporary relief on the new FDTL norms until February 10, 2026, the agency expects the airline’s Q3 and Q4 performance to take a hit due to lost revenue, refunds, customer compensation and possible regulatory penalties.
Despite the severe disruption, ICRA maintained a stable outlook, citing IndiGo’s dominant 65% domestic market share, strong liquidity with ₹38,500 crore in unencumbered cash as of September 30, 2025, and healthy long-term demand outlook. However, it warned that IndiGo’s financial leverage is likely to breach its negative trigger of 2.5x in FY26, though this is expected to correct by the following year.
The rating agency highlighted near-term uncertainties—including the pace of operational normalisation, increased pilot hiring costs, the airline’s ability to pass on incremental expenses, and continuity in senior leadership amid DGCA show-cause notices.