IndiGo Lowers 2026 Q3 Outlook After DGCA Capacity Cut

India’s largest carrier IndiGo Airlines has revised down its financial guidance for the third quarter of the 2026 financial year ending December 31, following regulatory action by the Directorate General of Civil Aviation (DGCA) that imposed a 10% capacity reduction and intensified operational oversight after widespread disruptions.

In a regulatory filing dated December 10, IndiGo said it now expects capacity growth, measured in available seat kilometres (ASK), to be in the high single- to low double-digit range, compared with its earlier forecast of high-teens growth. Passenger unit revenue (PRASK) is now projected to decline by mid-single digits, a downgrade from the airline’s previous guidance of flat to marginal growth.

The revision follows a DGCA order issued on December 9 directing IndiGo to reduce its scheduled domestic operations by 10% for the winter 2025 timetable. The airline said the mandated cut will affect its capacity outlook for the third and fourth quarters as well as the full financial year.

Alongside the capacity restriction, the DGCA has deployed an eight-member oversight team to monitor IndiGo’s operational recovery. Two officials have been stationed at the airline’s Gurugram headquarters to assess fleet availability, crew utilisation, unplanned leave patterns and passenger refund processing. The regulator has also launched on-site inspections at 11 airports across India to review safety standards, passenger handling and operational responsiveness.

The intervention followed the cancellation of around 4,500 flights in early December, linked to disruptions caused by the implementation of revised flight duty time limitation rules. IndiGo said services have since been restored across an optimised network. The DGCA has summoned CEO Pieter Elbers to present detailed data on the disruptions and issued show-cause notices to senior management, while granting a temporary exemption from select duty time rules for A320 pilots until February 10, 2026.

Meanwhile, rival SpiceJet has moved to capitalise on the capacity gap, announcing plans to add up to 100 daily flights this winter, supported by aircraft returning to service through damp leases and reactivations.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com