IndiGo flight cancellations: Emkay sees 17% hit on FY26 pre-tax profit

On Tuesday, DGCA directed IndiGo to reduce winter schedule by 5 per cent across sectors, especially on high-frequency flights. Meanwhile, IndiGo share price is down 18 per cent in December 2025

IndiGo flight cancellation latest update, financial impact

  The unprecedented crisis at InterGlobe Aviation-run IndiGo may dent the airline's revenue by 3 per cent and pre-tax profit by 17 per cent in the current financial year 2025-26 (FY26), predict analysts at Emkay Global Financial Services.

 

Analysing the financial impact of the IndiGo flight cancellations, analysts at the domestic brokerage said the situation remains evolving with upside risks with respect to government actions.

 

"A penalty could be a near-term action by the Government of India. Besides, IndiGo may also be directed to further compensate the affected parties. The Government may want to bring in more players, though the global aviation supply-chain scenario remains challenging," the brokerage said.

 

Additionally, uncertainty persists around IndiGo's ability to meet revised Flight Duty Time Limitations (FDTL) norms by February 10, 2026, when these regulations are scheduled to be reimposed after a temporary suspension.  On the bourses, IndiGo share price declined for a seventh straight day on Tuesday. The stock has slipped 18 per cent in December 2025 as against a 1.5 per cent dip in the BSE Sensex index.

 

DGCA cuts IndiGo's winter flights

Notably, on Tuesday, the aviation industry watchdog, Director General of Civil Aviation (DGCA) directed IndiGo to reduce winter schedule by 5 per cent across sectors, especially on high-frequency flights.

 

"IndiGo has not demonstrated an ability to operate schedules efficiently. We are reducing slots allocated to IndiGo in winter scheduled to avoid single-flight ops on a sector... IndiGo is required to submit a revised Winter Schedule by 5 PM on December 10, 2025," DGCA said in a statement. IndiGo was expected to normalise operations by December 10.

 

IndiGo flight cancellations: Financial impact

Over the past eight days, IndiGo has cancelled more than 4,200 flights, which is equivalent to nearly 23 per cent of over 2,300 flights that the company was scheduled to fly daily in December 2025, as per Emkay Global Financial Services.

 

While conditions have improved over the last few days -- with cancellations easing to about 530 flights on December 8 -- the crisis at India's biggest airline by market share has raised concerns around regulatory scrutiny, capacity normalisation, and rising costs.

 

Factoring in the operational disruption, the brokerage estimates a 3 per cent cut in FY26 revenue, an 8 per cent reduction in the airline's Ebitda, and a sharper 17 per cent downgrade to profit before tax (excluding forex). These estimates were drawn before DGCA’s latest order on the Winter Schedule.

 

Nonetheless, the estimates, Emkay Global said, assumes a 2 per cent hit each to volumes and yields, along with a modest increase in costs per available seat kilometre (CASK).

 

Further, the brokerage estimates around 4,800 flight cancellations by IndiGo between December 1 and 10, and expects 2,100 flights cancellations per day for the remaining month.

 

"This implies a near 4-per cent volume impact for Q3FY26. Hence, 16-17 per cent year-on-year ASK (available seat kilometer) growth guided earlier may reduce to 12-13 per cent, while RPK (revenue passenger kilometer) growth may reduce to 11-12 per cent. In Q4FY26, ASK growth could be ~2 per cent lower at 14-15 per cent vs high-teens growth guided earlier," Emkay Global said.

 

PRASK (Passenger Revenue per Available Seat Kilometer) guidance for Q3FY26 was flat-to-slightly up Y-o-Y earlier. But now, we expect to be mildly down.

 

On the cost front, IndiGo was short of 65 captains and 59 co-pilots in November. IndiGo, however, plans to induct 158 pilots by February 2026 and over 700 more by the end of the year, which could lift pilot salary costs by 6–7 per cent.

 

"Additionally, customer compensation, accommodation, logistics, and other incidentals incurred during the disruption are likely to push up Q3 CASK, even as declining fuel prices offer some offset," the brokerage said.  CATCH STOCK MARKET LIVE UPDATES TODAY

Emkay Global cuts IndiGo's target price

Reflecting these risks, Emkay Global has reduced IndiGo’s share price target by over 7 per cent to ₹6,300 and lowered the valuation multiple to 22-times forward earnings from 23-times earlier.

 

IndiGo: A formidable player

That said, despite InterGlobe Aviation-operated IndiGo navigating an unprecedented operational crisis, analysts at the brokerage have maintained a constructive long-term view on India’s largest airline.

 

It has retained its 'Buy' rating on IndiGo stock, citing its strategic importance in the Indian aviation ecosystem and the likelihood of operational normalization reviving growth momentum.

 

Why has IndiGo cancelled so many flights?

The current crisis was largely triggered by the implementation of tighter FDTL norms, including longer weekly rest periods, stricter night-duty restrictions, and limits on consecutive night operations. Combined with winter schedule pressures, weather disruptions, congestion, and software-related challenges, these rules led to cascading disruptions, culminating in over 1,600 cancellations on December 5 alone. The DGCA has since kept the norms in abeyance for the A320 fleet until February 2026, offering temporary relief.